PREP2012-Pack1-RC-001

Themodernmultinationalcorporationisdescribedashavingoriginatedwhentheowner-managersofnineteenth-centuryBritishfirmscarryingoninternationaltradewerereplacedbyteamsofsalariedmanagersorganizedintohierarchies.Increasesinthevolumeoftransactionsinsuchfirmsarecommonlybelievedtohavenecessitatedthisstructuralchange.Nineteenth-centuryinventionsthesteamshipandthetelegraph,byfacilitatingcoordinationofmanagerialactivities,aredescribedaskeyfactors.Sixteenth-andseventeenth-centurycharteredtradingcompanies,despitetheinternationalscopeoftheiractivities,areusuallyconsideredirrelevanttothisdiscussion:thevolumeoftheirtransactionsisassumedtohavebeentoolowandthecommunicationsandtransportoftheirdaytooprimitivetomakecomparisonswithmodernmultinationalsinteresting.

Inreality,however,earlytradingcompaniessuccessfullypurchasedandoutfittedships,builtandoperatedofficesandwarehouses,manufacturedtradegoodsforuseabroad,maintainedtradingpostsandproductionfacilitiesoverseas,procuredgoodsforimport,andsoldthosegoodsbothathomeandinothercountries.Thelargevolumeoftransactionsassociatedwiththeseactivitiesseemstohavenecessitatedhierarchicalmanagementstructureswellbeforetheadventofmoderncommunicationsandtransportation.Forexample,intheHudson'sBayCompany,eachtradingoutpostwasmanagedbyasalariedagent,whocarriedoutthetradewiththeNativeAmericans,managedday-to-dayoperations,andoversawthepost'sworkersandservants.Onechiefagent,answerabletotheCourtofDirectorsinLondonthroughthecorrespondencecommittee,wasappointedwithcontroloveralloftheagentsonthebay.

Theearlytradingcompaniesdiddifferstrikinglyfrommodernmultinationalsinmanyrespects.Theydependedheavilyonthenationalgovernmentsoftheirhomecountriesandthuscharacteristicallyactedabroadtopromotenationalinterests.Theirtopmanagersweretypicallyownerswithasubstantialminorityshare,whereasseniormanagers’holdingsinmodernmultinationalsareusuallyinsignificant.Theyoperatedinapreindustrialworld,graftingasystemofcapitalistinternationaltradeontoapre-modernsystemofartisanandpeasantproduction.Despitethesedifferences,however,earlytradingcompaniesorganizedeffectivelyinremarkablymodernwaysandmeritfurtherstudyasanaloguesofmoremodernstructures.

PREP2012-Pack1-RC-001-01VRC00009-01Medium

Theauthor'smainpointisthat

modernmultinationalsoriginatedinthesixteenthandseventeenthcenturieswiththeestablishmentofcharteredtradingcompanies

thesuccessofearlycharteredtradingcompanies,likethatofmodernmultinationals,dependedprimarilyontheirabilitytocarryoutcomplexoperations

earlycharteredtradingcompaniesshouldbemoreseriouslyconsideredbyscholarsstudyingtheoriginsofmodernmultinationals

scholarsarequitemistakenconcerningtheoriginsofmodernmultinationals

themanagementstructuresofearlycharteredtradingcompaniesarefundamentallythesameasthoseofmodernmultinationals

PREP2012-Pack1-RC-001-02VRC00009-02Medium

Itcanbeinferredfromthepassagethattheauthorwouldcharacterizetheactivitiesengagedinbyearlycharteredtradingcompaniesasbeing

complexenoughinscopetorequireasubstantialamountofplanningandcoordinationonthepartofmanagement

toosimpletobeconsideredsimilartothoseofamodernmultinationalcorporation

asintricateasthosecarriedoutbythelargestmultinationalcorporationstoday

oftenunprofitableduetoslowcommunicationsandunreliablemeansoftransportation

hamperedbythepoliticaldemandsimposedonthembythegovernmentsoftheirhomecountries

PREP2012-Pack1-RC-001-03VRC00009-03Hard

Theauthorthevariousactivitiesofearlycharteredtradingcompaniesinorderto

analyzethevariouswaysinwhichtheseactivitiescontributedtochangesinmanagementstructureinsuchcompanies

demonstratethatthevolumeofbusinesstransactionsofsuchcompaniesexceededthatofearlierfirms

refutetheviewthatthevolumeofbusinessundertakenbysuchcompanieswasrelativelylow

emphasizetheinternationalscopeofthesecompanies‘operations

supporttheargumentthatsuchfirmscoordinatedsuchactivitiesbyusingavailablemeansofcommunicationandtransport

PREP2012-Pack1-RC-001-04VRC00009-04Medium

Withwhichofthefollowinggeneralizationsregardingmanagementstructureswouldtheauthorofthepassagemostprobablyagree?

Hierarchicalmanagementstructuresarethemostefficientmanagementstructurespossibleinamoderncontext.

Firmsthatroutinelyhaveahighvolumeofbusinesstransactionsfinditnecessarytoadopthierarchicalmanagementstructures.

Hierarchicalmanagementstructurescannotbesuccessfullyimplementedwithoutmoderncommunicationsandtransportation.

Modernmultinationalfirmswitharelativelysmallvolumeofbusinesstransactionsusuallydonothavehierarchicallyorganizedmanagementstructures.

Companiesthatadopthierarchicalmanagementstructuresusuallydosoinordertofacilitateexpansionintoforeigntrade.

PREP2012-Pack1-RC-001-05VRC00009-05Medium

Thepassagesuggeststhatmodernmultinationalsdifferfromearlycharteredtradingcompaniesinthat

thetopmanagersofmodernmultinationalsownstockintheirowncompaniesratherthansimplyreceivingasalary

modernmultinationalsdependonasystemofcapitalistinternationaltraderatherthanonlessmoderntradingsystems

modernmultinationalshaveoperationsinanumberofdifferentforeigncountriesratherthanmerelyinoneortwo

theoperationsofmodernmultinationalsarehighlyprofitabledespitethemorestringentenvironmentalandsafetyregulationsofmoderngovernments

theoverseasoperationsofmodernmultinationalsarenotgovernedbythenationalinterestsoftheirhomecountries

PREP2012-Pack1-RC-002

Ameteorstreamiscomposedofdustparticlesthathavebeenejectedfromaparentcometatavarietyofvelocities.Theseparticlesfollowthesameorbitastheparentcomet,butduetotheirdifferingvelocitiestheyslowlygainonorfallbehindthedisintegratingcometuntilashroudofdust

surroundstheentirecometaryorbit.Astronomershavehypothesizedthatameteorstreamshouldbroadenwithtimeasthedustparticles’individualorbitsareperturbedbyplanetarygravitationalfields.Arecentcomputer-modelingexperimenttestedthishypothesisbytrackingtheinfluenceofplanetarygravitationoveraprojected5,000-yearperiodonthepositionofagroupofhypotheticaldustparticles.Inthemodel,theparticleswererandomlydistributedthroughoutacomputer

simulationoftheorbitofanactualmeteorstream,theGeminid.Theresearcherfound,asexpected,thatthecomputer-modelstreambroadenedwithtime.Conventionaltheories,however,predictedthatthedistributionofparticleswouldbeincreasinglydensetowardthecenterofameteorstream.Surprisingly,thecomputer-modelmeteorstreamgraduallycametoresembleathick-walled,hollowpipe.

WhenevertheEarthpassesthroughameteorstream,ameteorshoweroccurs.Movingatover1,500,000milesperdayarounditsorbit,theEarthwouldtake,onaverage,justoveradaytocrossthehollow,computer-modelGeminidstreamifthestreamwere5,000yearsold.Twobriefperiodsofpeakmeteoractivityduringtheshowerwouldbeobserved,oneastheEarthenteredthethick-walled“pipe"andoneasitexited.ThereisnoreasonwhytheEarthshouldalwayspassthroughthestream'sexactcenter,sothetimeintervalbetweenthetwoburstsofactivitywouldvaryfromoneyeartothenext.

Hasthepredictedtwin-peakedactivitybeenobservedfortheactualyearlyGeminidmeteorshower?TheGeminiddatabetween1970and1979showjustsuchabifurcation,asecondaryburstofmeteoractivitybeingclearlyvisibleatanaverageof19hours(1,200,000miles)afterthefirstburst.ThetimeintervalsbetweentheburstssuggesttheactualGeminidstreamisabout3,000yearsold.

PREP2012-Pack1-RC-002-01VRC07544-01Hard

Theauthorstatesthattheresearchdescribedinthefirstparagraphwasundertakeninorderto

determinetheageofanactualmeteorstream

dentifythevariousstructuralfeaturesofmeteorstreams

explorethenatureofaparticularlyinterestingmeteorstream

testthehypothesisthatmeteorstreamsbecomebroaderastheyage

showthatacomputermodelcouldhelpinexplainingactualastronomicaldata

PREP2012-Pack1-RC-002-02VRC07544-02Hard

ItcanbeinferredfromthepassagethatwhichofthefollowingwouldmostprobablybeobservedduringtheEarth'spassagethroughameteorstreamiftheconventionaltheoriesmentionedinthehighlightedtextwerecorrect?

Meteoractivitywouldgraduallyincreasetoasingle,intensepeak,andthengraduallydecline.

Meteoractivitywouldbesteadythroughouttheperiodofthemeteorshower.

Meteoractivitywouldrisetoapeakatthebeginningandattheendofthemeteorshower.

Randomburstsofveryhighmeteoractivitywouldbeinterspersedwithperiodsofveryactivity.

InyearsinwhichtheEarthpassedthroughonlytheouterareasofameteorstream,meteoractivitywouldbeabsent.

PREP2012-Pack1-RC-002-03VRC07544-03Hard

Accordingtothepassage,whydothedustparticlesinameteorstreameventuallysurroundacomet'soriginalorbit?

Theyareejectedbythecometatdifferingvelocities.

Theirorbitsareuncontrolledbyplanetarygravitationalfields.

Theybecomepartofthemeteorstreamatdifferenttimes.

Theirvelocityslowsovertime.

Theirejectionvelocityisslowerthanthatofthecomet.

PREP2012-Pack1-RC-002-04VRC07544-04Hard

Thepassagesuggeststhatwhichofthefollowingisapredictionconcerningmeteorstreamsthatcanbederivedfromboththeconventionaltheoriesmentionedinthehighlightedtextandthenewcomputerderivedtheory?

Dustparticlesinameteorstreamwillusuallybedistributedevenlythroughoutanycrosssectionofthestream.

TheorbitsofmostmeteorstreamsshouldcrosstheorbitoftheEarthatsomepointandgiverisetoameteorshower.

Overtimethedistributionofdustinameteorstreamwillusuallybecomedenserattheoutsideedgesofthestreamthanatthecenter.

Meteorshowerscausedbyoldermeteorstreamsshouldbe,onaverage,longerindurationthanthosecausedbyveryyoungmeteorstreams.

Theindividualdustparticlesinoldermeteorstreamsshouldbe,onaverage,smallerthanthosethatcomposeyoungermeteorstreams.

PREP2012-Pack1-RC-002-05VRC07544-05Medium

Whichofthefollowingisanassumptionunderlyingthelastsentenceofthepassage?

Ineachoftheyearsbetween1970and1979,theEarthtookexactly19hourstocrosstheGeminidmeteorstream.

ThecometassociatedwiththeGeminidmeteorstreamhastotallydisintegrated.

TheGeminidmeteorstreamshouldcontinuetoexistforatleast5,000years.

TheGeminidmeteorstreamhasnotbroadenedasrapidlyastheconventionaltheorieswouldhavepredicted.

Thecomputer—modelGeminidmeteorstreamprovidesanaccuraterepresentationofthedevelopmentoftheactualGeminidstream.

PREP2012-Pack1-RC-003

TworecentpublicationsofferdifferentassessmentsofthecareerofthefamousBritishnurseFlorenceNightingale.AbookbyAnneSummersseekstodebunktheidealizationsandpresentarealityatoddswithNightingale'sheroicreputation.AccordingtoSummers,Nightingale'simportanceduringtheCrimeanWarhasbeenexaggerated:notuntilnearthewar'senddidshebecomesupervisorofthefemalenurses.Additionally,Summerswritesthatthecontributionofthenursestothereliefofthewoundedwasatbestmarginal.Theprevailingproblemsofmilitarymedicinewerecausedbyarmyorganizationalpractices,andtheadditionofafewnursestothemedicalstaffcouldbenomorethansymbolic.Nightingale’splaceinthenationalpantheon,Summersasserts,islargelyduetothepropagandisticeffortsofcontemporarynewspaperreporters.

Bycontrast,theeditorsofanewvolumeofNightingale'slettersviewNightingaleasapersonwhosignificantlyinfluencednotonlyherownagebutalsosubsequentgenerations.Theyhighlightherongoingeffortstoreformsanitaryconditionsafterthewar.Forexample,whenshelearnedthatpeacetimelivingconditionsinBritishbarracksweresohorriblethatthedeathrateofenlistedmenfarexceededthatofneighboringcivilianpopulations,shesucceededinpersuadingthegovernmenttoestablishaRoyalCommissionontheHealthoftheArmy.Sheusedsumsraisedthroughpubliccontributionstofoundanurses’traininghospitalinLondon.Eveninadministrativematters,theeditorsassert,herpracticalintelligencewasformidable:asrecentlyas1947theBritishArmy'smedicalserviceswerestillusingthecost-accountingsystemshehaddevisedinthe1860's.

IbelievethattheevidenceofherletterssupportscontinuedrespectforNightingale'sbrillianceandcreativity.Whencounselingavillageschoolmastertoencouragechildrentousetheirfacultiesofobservation,shesoundslikeamoderneducator.Herinsistenceonclassifyingtheproblemsoftheneedyinordertodeviseappropriatetreatmentsissimilartotheapproachofmodernsocialworkers.Insum,althoughNightingalemaynothaveachievedallofhergoalsduringtheCrimeanWar,herbreadthofvisionandabilitytorealizeambitiousprojectshaveearnedheraneminentplaceamongtheranksofsocialpioneers.

PREP2012-Pack1-RC-003-01VRC07619-01Medium

Thepassageisprimarilyconcernedwithevaluating

theimportanceofFlorenceNightingale'sinnovationsinthefieldofnursing

contrastingapproachestothewritingofhistoricalbiography

contradictoryaccountsofFlorenceNightingale’shistoricalsignificance

thequalityofhealthcareinnineteenthcenturyEngland

theeffectoftheCrimeanWarondevelopmentsinthefieldofhealthcare

PREP2012-Pack1-RC-003-02VRC07619-02Hard

Accordingtothepassage,theeditorsofNightingale’sletterscreditherwithcontributingtowhichofthefollowing?

ImprovementofthesurvivalrateforsoldiersinBritishArmyhospitalsduringtheCrimeanWar

Thedevelopmentofanurses’trainingcurriculumthatwasfarinadvanceofitsday

TheincreaseinthenumberofwomendoctorspracticinginBritishArmyhospitals

EstablishmentofthefirstfacilityfortrainingnursesatamajorBritishuniversity

ThecreationofanorganizationformonitoringthepeacetimeIrvingconditionsofBritishsoldiers

PREP2012-Pack1-RC-003-03VRC07619-03Easy

ThepassagesuggestswhichofthefollowingaboutNightingale’srelationshipwiththeBritishpublicofherday?

Shewashighlyrespected,herprojectsreceivingpopularandgovernmentalsupport.

Sheencounteredresistancebothfromthearmyestablishmentandthegeneralpublic.

Shewassupportedbytheworkingclassesandopposedbythewealthierclasses.

Shewassupportedbythemilitaryestablishmentbuthadtofightthegovernmentalbureaucrat.

Afterinitiallybeingreceivedwithenthusiasm,shewasquicklyforgotten.

PREP2012-Pack1-RC-003-04VRC07619-04Easy

WithwhichofthefollowingstatementsregardingthedifferinginterpretationsofNightingale’simportancewouldtheauthormost

SummersmisunderstoodboththeimportanceofNightingale'sachievementsduringtheCrimeanWarandhersubsequentinfluenceonBritishpolicy.

TheeditorsofNightingale’slettersmadesomevalidpointsaboutherpracticalachievements,buttheystillexaggeratedherinfluenceonsubsequentgenerations.

AlthoughSummers’accountofNightingale’sroleintheCrimeanWarmaybeaccurate;sheignoredevidenceofNightingale’ssubsequentachievementthatsuggeststhatherreputationasaneminentsocialreformeriswelldeserved.

TheeditorsofNightingale'slettersmistakenlypropagatedtheoutdatedidealizationofNightingalethatonlyimpedesattemptstoarriveatabalancedassessmentofhertruerole.

TheevidenceofNightingale'sLetterssupportsSummers’conclusionsbothaboutNightingale’sactivitiesandaboutherinfluence.

PREP2012-Pack1-RC-003-05VRC07619-05Medium

Inthelastparagraph,theauthorisprimarilyconcernedwith

summarizingtheargumentsaboutNightingalepresentedinthefirsttwoparagraphs

refutingtheviewofNightingale'scareerpresentedintheprecedingparagraph

analyzingtheweaknessesoftheevidencepresentedelsewhereinthepassage

citingevidencetosupportaviewofNightingale’scareer

correctingafactualerroroccurringinoneoftheworksunderreview

PREP2012-Pack1-RC-004

Customerloyaltyprogramsareattemptstobondcustomerstoacompanyanditsproductsandservicesbyofferingincentives—suchasairlinefrequentflyerprogramsorspecialcreditcardswithvaluablebenefits—t0loyalcustomers.Insupportofloyaltyprograms,companiesofteninvokethe“80/20"principle,whichstatesthatabout80percentofrevenuetypicallycomesfromonlyabout20percentofcustomers.However,thisprofitable20percentarenotnecessarilyloyalbuyers,especiallyinthesenseofexclusiveloyalty.Studieshavedemonstratedthatonlyabout10percentofbuyersformanytypesoffrequentlypurchasedconsumergoodsare100percentloyaltoaparticularbrandoveraone-yearperiod.Moreover,100-percent-loyalbuyerstendtobelightbuyersoftheproductorservice.“Dividedloyalty”betterdescribesactualconsumerbehavior,since

customerstypicallyvarythebrandstheybuy.Thereasonsforthisbehaviorarefairlystraightforward:peoplebuydifferentbrandsfordifferentoccasionsorforvariety,orabrandmaybetheonlyoneinstockormayofferbettervaluebecauseofaspecialdeal.Mostbuyerswhochangebrandsarenotlostforever;usually,theyareheavyconsumerswhosimplyprefertobuyanumberofbrands.Suchmultibandloyaltymeansthatonecompany'smostprofitablecustomerswillprobablybeitscompetitors’mostprofitablecustomersaswell.

Still,advocatesofloyaltyprogramscontendthatsuchprogramsarebeneficialbecausethecostsofservinghighlyloyalcustomersarelower,andbecausesuchloyalcustomersarelesspricesensitivethanothercustomers.Itistruethatwhentherearestart-upcosts,suchascreditchecks,involvedinservinganewcustomer,thecostsexceedthoseofservingarepeatcustomer.However,itisnotatallclearwhythecostsofservingahighlyloyalcustomershouldinprinciplebedifferentfromthoseofservinganyothertypeofrepeatcustomer.Thekeyvariablesdrivingcostaresizeandtypeoforder,specialversusstandardorder,andsoon,nothigh-loyaltyversusdivided-loyalty

customers.Asforpricesensitivity,highlyloyalcustomersmayinfactcometoexpectapricediscountasarewardfortheirloyalty.

PREP2012-Pack1-RC-004-01VRC000108-01Medium

Theprimarypurposeofthepassageisto

questionthenotionthatcustomerloyaltyprogramsarebeneficial

examinethereasonswhymanycustomersbuymultiplebrandsofproducts

proposesomepossiblealternativestocustomerloyaltyprograms

demonstratethatmostcustomersarenotcompletelyloyaltoanyonebrandofproductorservice

comparethebenefitsofcustomerloyaltyprogramswiththoseofothertypesofpurchaseincentiveprograms

PREP2012-Pack1-RC-004-02VRC000108-02Easy

Thepassagementionseachofthefollowingasapotentialreasonforcustomers’dividedloyaltyEXCEPT

aparticularbrandmaybetheonlyoneavailable

aparticularbrandmaybeofferedatadiscount

customerswilloftenbuymultiplebrandsoutofadesireforvariety

customerswilloftenbuyanunfamiliarbrandwhenitisnewonthemarket

customerswilloftenbuycertainbrandsforcertainoccasions

PREP2012-Pack1-RC-004-03VRC000108-03Easy

Accordingtothepassage,advocatesofcustomerloyaltyprogramsclaimwhichofthefollowingabouthighlyloyalcustomers?

Theyoftenexpectpricediscountsasarewardfortheirloyaltytoaproduct.

Theycanbeservedatlowerexpensetoacompanythancannonloyalcustomers.

Theytendtobelightbutpredictablebuyersoftheproductorserviceinquestion.

Theyaretotryoutnewbrandsorproductsthatappearonthemarket.

Theyaredifficulttodifferentiatestatisticallyfromothertypesofrepeatcustomers.

PREP2012-Pack1-RC-004-04VRC000108-04Easy

Thepassagesuggeststhatcompaniesthatinvokethe“80/20"principleinsupportofcustomerloyaltyprogramswhichofthefollowing

Awell-designedcustomerloyaltyprogramcanincreasethenumberofacompany'sloyalcustomersbyasmuchas80percent.

About20percentofanygivencompany'smostprofitablecustomersarelikelytobeitscompetitors’mostprofitablecustomersaswell.

Itisunreasonabletoexpectmorethan20percentofcustomerstobe100percentloyaltoanyparticularbrandofproduct.

Even“l(fā)oyal”customerscannotreasonablybeexpectedtosticktooneparticularbrandofproductmorethan80percentofthetime.

Arelativelysmallnumberofloyalcustomersisresponsibleforabout80percentofacompany'sprofits.

PREP2012-Pack1-RC-004-05VRC000108-05Medium

Thesecondparagraphfunctionsprimarilyto

proposesolutionstocertainproblemsinherentincustomerloyaltyprograms

emphasizecertainrisksinherentincustomerloyaltyprograms

addresscertaincontentionsputforthbyadvocatesofcustomerloyaltyprograms

defendcertainspecificaspectsofcustomerloyaltyprogramsagainstcriticism

reconcilecompetingviewpointsregardingtheofcustomerloyaltyprograms

PREP2012-Pack1-RC-004-06VRC000108-07Medium

Theauthorofthepassagesuggeststhatwhichofthefollowingismostlikelytobetrueofacustomerwhoisexclusivelyloyaltoaparticularbrandofproduct?

Thecustomerprobablybeganbuyingthatbrandofproductonlywithinthepastyear.

Thecustomerisprobablyamongthemostprofitablecustomersforthecompanythatmanufacturesthatbrandofproduct.

Thecustomerisprobablynotaheavyconsumerofthatparticulartypeofproduct.

Thecustomerisprobablyaloyalcustomerwhenpurchasingothertypesofproductsaswell.

Thecustomerprobablysamplednumerousbrandsofthattypeofproductbeforebecomingloyaltoaparticularbrand.

PREP2012-Pack1-RC-005

Manymanagersareinfluencedbydangerousmythsaboutpaythatleadtocounterproductivedecisionsabouthowtheircompaniescompensateemployees.Onesuchmythisthatlaborrates,therateperhourpaidtoworkers,areidenticalwithlaborcosts,themoneyspentonlaborinrelationtotheproductivityofthelaborforce.Thismythleadstotheassumptionthatacompanycansimplyloweritslaborcostsbycuttingwages.Butlaborcostsandlaborratesarenotinfactthesame:onecompanycouldpayitsworkersconsiderablymorethananotherandyethavelowerlaborcostsifthatcompany'sproductivitywerehigherduetothetalentofitsworkforce,theefficiencyofitsworkprocesses,orotherfactors.Theconfusionofcostswithratespersistspartlybecauselaborratesareaconvenienttargetformanagerswhowanttomakeanimpactontheircompany'sbudgets.Becauselaborratesarehighlyvisible,managerscaneasilycomparetheircompany'srateswiththoseofcompetitors.Furthermore,laborratesoftenappeartobeacompany'smostmalleablefinancialvariable:cuttingwagesappearsaneasierwaytocontrolcoststhansuchoptionsasreconfiguringworkprocessesoralteringproductdesign.

Themyththatlaborratesandlaborcostsareequivalentissupportedbybusinessjournalists,whofrequentlyconfoundthetwo.Forexample,prominentbusinessjournalsoftenremarkonthe“high"costofGermanlabor,citingasevidencetheaverageamountpaidtoGermanworkers.Themythisalsoperpetuatedbythecompensationconsultingindustry,whichhasitsownincentivetokeepsuchmythsalive.First,althoughsomeoftheseconsultingfirmshaverecentlybroadenedtheirpracticesbeyondtheareaofcompensation,theirmainstaycontinuestobeadvisingcompaniesonchangingtheircompensationpractices.Suggestingthatacompany'sperformancecanbeimprovedinsomeotherwaythanbyalteringitspaysystemmaybeempiricallycorrectbutcontrarytotheconsultants’interests.Furthermore,changestothecompensationsystemmayappeartobesimpler

toimplementthanchangestootheraspectsofanorganization,somanagersaremorelikelytofindsuchadvicefromconsultantspalatable.Finally,totheextentthatchangesincompensationcreatenewproblems,theconsultantswillcontinuetohaveworksolvingtheproblemsthatresultfromtheiradvice.

PREP2012-Pack1-RC-005-01VRC000361-01Medium

Theauthorofthepassagementionsbusinessjournals(seehighlightedtext)primarilyinorderto

demonstratehowaparticularkindofevidencecanbeusedtosupporttwodifferentconclusions

castdoubtonaparticularviewabouttheaverageamountpaidtoGermanworkers

suggestthatbusinessjournalistsmayhaveavestedinterestinperpetuatingaparticularview

identifyonesourceofsupportforaviewcommonamongbusinessmanagers

indicateawayinwhichaparticularmythcouldbedispelled

PREP2012-Pack1-RC-005-02VRC000361-02Easy

Accordingtothepassage,whichofthefollowingistrueaboutchangestoacompany'scompensationsystem?

Theyareoftenimplementedinconjunctionwithacompany'seffortstoreconfigureitsworkprocesses.

Theyhavebeenadvocatedbyprominentbusinessjournalsasthemostdirectwayforacompanytobringaboutchangesinitslaborcosts.

Theyaremorelikelytoresultinanincreaseinlaborcoststhantheyaretobringaboutcompetitiveadvantagesforthecompany.

Theysometimesresultinsignificantcostsavingsbutarelikelytocreatelabor-relationsproblemsforthecompany.

Theymayseemtomanagerstoberelativelyeasytoimplementcomparedwithotherkindsofchangesmanagersmightconsider.

PREP2012-Pack1-RC-005-03VRC000361-04Easy

Theprimarypurposeofthepassageisto

describeacommonpracticeusedbymanagerstocontrollaborcosts

examinetherelationbetweenlaborcostsandothercostsincurredbybusinesses

explainwhylaborratesareamoresignificantfactorthanlaborcostsformostbusinesses

dentifyacommonmisperceptionheldbymanagersandpointoutsomeofthereasonsforits

persistence

distinguishbetweenafactorthatcompaniescaneasilycontrolandanotherthatismoredifficulttochange

PREP2012-Pack1-RC-005-04VRC000361-05Medium

Itcanbeinferredfromthepassagethattheauthorwouldbemostlikelytoagreewithwhichofthefollowingstatementsaboutcompensation?

Acompany'slabo