RC Practice with Explanation

Tips on how to approach CAT Reading Comprehension passages
  • Don’t get into the minor details of the passage; just focus on what each paragraph has to say
  • As you read, create a map of the passage; you must remember what thing is located where in the passage
  • Once you read the question, come back to the part of the passage that is likely to have the answer
  • Compare the options and eliminate the incorrect choices based on the evidence that you see in the passage
  • Choose the answer once you are convinced of the right choice

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Passage

As formal organizations, business corporations are distinguished by their particular goals, which include maximization of profits, growth, and survival. Providing goods and services is a means to this end. The following statement from the board of directors of the 3M Company is exemplary in this regard: “The objective of the 3M Company is to produce quality goods and services that are useful and needed by the public, acceptable to the public, and in the best interests of the global economy—and thereby to earn a profit which is essential to the perpetuation of the useful role of the company.”
These goals provide the raison d’etre and ultimate ethical values of the 3M Company. If, for example, a number of individuals (outsiders or even insiders) believe that a company’s aggressive marketing of infant formula in third world countries is morally wrong, the company is unlikely to be moved by arguments based on ethos alone as long as what it is doing remains profitable. But if those opposed to the company’s practice organize a highly effective boycott of the company’s products, their moral views will soon enter into the company’s deliberations indirectly as limiting operating conditions. They can, at this point, no more be ignored than a prohibitive increase in the costs of certain raw materials.
Although the concepts and categories of ethics may be applied to the conduct of corporations, there are important differences between the values and principles underlying corporate behavior and those underlying the actions of most individuals. As individuals, we are often concerned with integrity, autonomy, and responsibility even when they cannot be shown to further a basic goal such as overall happiness; we regard them as important and valuable in themselves and not simply as a means to some other more basic end.
If corporations are by their nature end- or goal-directed how can they acknowledge acts as wrong in and of themselves? Is it possible to hold one criminally responsible for acts that if performed by a human person would result in criminal liability?
The first case of this type to achieve widespread public attention was the attempt to prosecute the Ford Motor Company for manslaughter as the result of alleged negligent or reckless decision making concerning the safety engineering of the Pinto vehicle. Although the defendant corporation and its officers were found innocent after trial, the case can serve as an exemplar for our purposes.
In essence, the prosecution in this case attempted to show that the corporation had produced and distributed a vehicle that was known to be defective at the time of production and sale, and that even after a great deal of additional information accumulated regarding the nature of the problems, the corporation took no action to correct them. The obvious noncorporate analogy would be the prosecution of a person who was driving a car with brakes known to be faulty, who does not have them repaired because it would cost too much, and who kills someone when the brakes eventually fail and the car does not stop in time. Such cases involving individuals are prosecuted and won regularly.
If corporations have no concept of right or wrong because they are exclusively goal-directed, can they be convicted in cases of this type, and what purpose would be served by such a conviction? Perhaps we can make a utilitarian argument for convicting corporations of such crimes. The argument would be that of deterrence; conviction and punishment would deter other corporations from taking similar actions under similar circumstances. However, there appears to be considerable evidence that deterrence does not work on corporations, even if, arguably, it works on individuals. The possibility of being discovered and the potential magnitude of the fine merely become more data to be included in the analysis of limiting conditions.

Question: A claim that things have ethical value to corporations only insofar as they are instrumental in furthering the ultimate goals of the corporation is:
[A] necessarily true, given the information presented in the passage.
[B] perhaps true, and supported by the information presented in the passage.
[C] perhaps true, but not supported by any information in the passage.
[D] necessarily false, given the information presented in the passage.
Answer
Option (B)


Explanation
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Question: In the context of the author’s reference to an organized body of people united in a belief and their subsequent action, the phrase limiting operating conditions (line 22) refers primarily to:
[A] the factors that will adversely impact a company’s profit-making capacity.
[B] the prevailing moral opinions of the public concerning a company’s products.
[C] the availability of raw materials necessary for producing a particular good.
[D] the difficulty a company’s officers have in trying to ignore ethical issues.
Answer
Option (A)


Explanation
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Question: Implicit in the author’s discussion of whether or not a corporation can be convicted in cases like the one involving the Pinto vehicle is the assumption that:
[A] most corporations have committed both moral and legal transgressions.
[B] a corporation has an identity above and beyond its individual members.
[C] few corporate persons will question their corporation’s actions.
[D] corporations do not always believe that the end justifies the means.
Answer
Option (B)


Explanation
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Question: If a company that produced shampoo products opted to stop the routine testing of its products on animals because it decided that it is wrong to cause the animals pain, what effect would this have on the argument made in the passage?
[A] It would strongly support the argument.
[B] It would support the argument somewhat, but not conclusively.
[C] It would neither support nor substantially weaken the argument.
[D] It would substantially weaken the argument.
Answer
Option (D)


Explanation
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Question: The author’s analogy of the alleged actions of the Ford Motor Company to those of a person who knowingly drives with faulty brakes suggests that:
[A] Ford should have been convicted of the crime of manslaughter in the trial.
[B] the Ford corporation was capable of understanding the moral concepts of right and wrong.
[C] the problem with the safety engineering of the Pinto had to do specifically with its brakes.
[D] Ford may have ignored the Pinto’s defects because they would be too costly to correct.
Answer
Option (D)


Explanation
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Question: Which of the following assertions would most strengthen the author’s claim that deterrence will not work on corporations?
[A] The possibility of punishment does not deter many individuals from committing crimes.
[B] The penalties imposed on companies have amounted to a small fraction of their profits.
[C] Strict anti-pollution laws have cut down on the waste dumped by companies into rivers.
[D] The trial of a corporation is often extended over a period of several years.
Answer
Option (B)


Explanation
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