FREE Reading Comprehension Practice Problems for CAT

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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Reading Comprehension Practice Passage

Since the late 1970’s, in the face of a severe loss of market share in dozens of industries, manufacturers in the United States have been trying to improve productivity—and therefore enhance their international competitiveness—through cost-cutting programs. However, from 1978 through 1982, productivity—the value of goods manufactured divided by the amount of labor input—did not improve; and while the results were better in the business upturn of the three years following, they ran 25 percent lower than productivity improvements during earlier, post-1945 upturns. At the same time, it became clear that the harder manufactures worked to implement cost-cutting, the more they lost their competitive edge.

With this paradox in mind, I recently visited 25 companies; it became clear to me that the cost-cutting approach to increasing productivity is fundamentally flawed. Manufacturing regularly observes a “40, 40, 20” rule. Roughly 40 percent of any manufacturing-based competitive advantage derives from long-term changes in manufacturing structure and in approaches to materials. Another 40 percent comes from major changes in equipment and process technology. The final 20 percent rests on implementing conventional cost-cutting. This rule does not imply that cost-cutting should not be tried. The well-known tools of this approach—including simplifying jobs and retraining employees to work smarter, not harder—do produce results. But the tools quickly reach the limits of what they can contribute.

Another problem is that the cost-cutting approach hinders innovation and discourages creative people. As Abernathy’s study of automobile manufacturers has shown, an industry can easily become prisoner of its own investments in cost-cutting techniques, reducing its ability to develop new products. And managers under pressure to maximize cost-cutting will resist innovation because they know that more fundamental changes in processes or systems will wreak havoc with the results on which they are measured. Production managers have always seen their job as one of minimizing costs and maximizing output. This dimension of performance has until recently sufficed as a basis of evaluation, but it has created a penny-pinching , mechanistic culture in most factories that has kept away creative managers.

Every company I know that has freed itself from the paradox has done so, in part, by developing and implementing a manufacturing strategy. Such a strategy focuses on the manufacturing structure and on equipment and process technology. In one company a manufacturing strategy that allowed different areas of the factory to specialize in different markets replaced the conventional cost-cutting approach; within three years the company regained its competitive advantage. Together with such strategies, successful companies are also encouraging managers to focus on a wider set of objectives besides cutting costs. There is hope for manufacturing, but it clearly rests on a different way of managing.


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Question: The author of the passage is primarily concerned with

summarizing a thesis
recommending a different approach
comparing points of view
making a series of predictions
describing a number of paradoxes

Question: It can be inferred from the passage that the manufacturers mentioned in line 2 expected that the measures they implemented would

encourage innovation
keep labor output constant
increase their competitive advantage
permit business upturns to be more easily predicted
cause managers to focus on a wider set of objectives

Question: The primary function of the first paragraph of the passage is to

outline in brief the author’s argument
anticipate challenges to the prescriptions that follow
clarify some disputed definitions of economic terms
summarize a number of long-accepted explanations
present a historical context for the author’s observations

Question: The author refers to Abernathy’s study most probably in order to

qualify an observation about one rule governing manufacturing
address possible objections to a recommendation about improving manufacturing competitiveness
support an earlier assertion about one method of increasing productivity
suggest the centrality in the United States economy of a particular manufacturing industry
given an example of research that has questioned the wisdom of revising a manufacturing strategy

Question: The author’s attitude toward the culture in most factories is best described as

cautious
critical
disinterested
respectful
adulatory

Question: In the passage, the author includes all of the following EXCEPT

personal observation
a business principle
a definition of productivity
an example of a successful company
an illustration of a process technology

Question: The author suggests that implementing conventional cost-cutting as a way of increasing manufacturing competitiveness is a strategy that is

flawed and ruinous
shortsighted and difficult to sustain
popular and easily accomplished
useful but inadequate
misunderstood but promising

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