techniques of analysis and application
DESCRIPTION
The Compounded Annual Growth Rate (CAGR) measures a market’s annual growth over a period of time (usually several years). This measure is a constant percentage rate at which a market would grow or contract year on year to reach its current value .TRANSCRIPT
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Module 4
Techniques of analysis and application
1. Compound Annual Growth Rate (CAGR)
The Compounded Annual Growth Rate (CAGR) measures a market‘s annual growth over a
period of time (usually several years). This measure is a constant percentage rate at which a
market would grow or contract year on year to reach its current value . CAGR is a formula
used to express the rate of growth in sales, earnings, units or some other measure over a
number of years. The CAGR is a more representative measure of annual growth over a
number of years.
The CAGR is calculated as follows:
CAGR = ( ( Y / X ) ^ (1 / N ) ) - 1
Where: ( ― ^ ― ) denotes ―to the power of ―
Where: Y is the value in the final year
Where: X is the value in the first year
Where: N is the number of years included in the calculation
CAGR-based forecasts do not show the effects of inflation that would impact the overall
dollar value in the future. CAGR -based forecasts are based on projected market volume and
price per unit measures.
Case Studies
Suppose Mach Corp. wants to know the growth rate of sales between the years of 1997
through 2003. In 1997, sales were $245 million dollars. In 2003, due to growth in the
company‘s electronic transistor business, the firm had sales $445 million dollars. As general
manager, you‘ve been asked to compute the compounded annual growth rate in sales for the
years between 1997 through 2003.
What is Mach Corp. Compounded Annual Growth Rate in sales between the years 1997
through 2003. ?
Formula
CAGR = ( $445 ) / ($245) ^ (1/ N-1 ) - 1
N = Total Years
^ = To the power of
Therefore,
10.45 % = ( $445 ) / ($245) ^ (1/ 6 ) - 1
Mach Corp. compounded growth rate in sales were 10.45 % per year since 1997.
1997 245
2003 445
=((B3/B2)^(1/6))-1 10.46%
CAGR: =((End Value/Start Value)^(1/(Periods - 1)) -1
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Forecasting
Forecasting is the establishment of future expectations by the analysis of past data, or the
formation of opinions.
Forecasting Techniques & Routes
Quantitative
Quantitative methods are based on an analysis of historical data concerning one or more time
series. A time series is a set of observations measured at successive points in time or over
successive periods of time. If the historical data used are restricted to past values of the series
that we are trying to forecast, the procedure is called a time series method. If the historical
data used involve other time series that are believed to be related to the time series that we are
trying to forecast, the procedure is called a causal method. Quantitative approaches are
generally preferred. Time Series Data is usually plotted on a graph to determine the various
characteristics or components of the time series data. There are 4 Major Components: Trend,
Cyclical, Seasonal, and Irregular Components.
2. Simple regression In statistics, simple linear regression is the least squares estimator of a linear regression
model with a single predictor variable. In other words, simple linear regression fits a straight
line through the set of n points in such a way that makes the sum of squared residuals of the
model (that is, vertical distances between the points of the data set and the fitted line) as small
as possible.
Techniques Quantitative Qualitative
Simple regressions
Multiple regressions
Time trends
Moving Average
Delphi method
Nominal group technique
Jury of executive opinion
Scenario projection
Routes
Top-down route
Bottom-up route
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X Y
YEAR $ BILLION
2002 515
2003 562
2004 605
2005 650
2006 894
2007 742
2008 782
2009 837
2010 913
2011 955
2012 992
2013 1,021
2014 1,038
2015 1,112
GLOBAL PHARMA MARKET
515 562 605 650
894
742 782837
y = 47.726x - 95017R² = 0.7378
0
200
400
600
800
1000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ B
llio
n
Year
Global Pharma Market
$ BILLION Linear ($ BILLION)
913 955 992 1,021 1,0381,112
y = 36.405x - 72261R² = 0.9678
0
200
400
600
800
1,000
1,200
2009 2010 2011 2012 2013 2014 2015 2016
$ B
illio
n
Year
Global Pharma Market Forecast
Series1 Linear (Series1)
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3. Multiple regressions: The Multiple Regression Analysis and Forecasting model provides a solid basis for
identifying value drivers and forecasting business plan data. While it utilizes a range of
commonly employed statistical measures to test the validity of the analysis, results are
summarized in text for ease of use. Once relationships have been identified, forecasting can
be accomplished based on a range of available methodologies.
Sales as a function of both time and marketing costs
GLOBAL PHARMA MARKET
YEAR MKTG. COSTS $ BILLION SALES $ BILLION
2002 100 515
2003 154 562
2004 200 605
2005 225 650
2006 265 894
2007 300 742
2008 350 782
2009 325 837
2010 340 913
2011 360 955
2012 375 992
2013 400 1,021
2014 410 1,038
2015 450 1,112
Regression Statistics Coefficients
Multiple R 0.952040235 Y Intercept -70419.9815
R Square 0.906380609 Year 35.42304649
Adjusted R Square 0.88765673 Marketing Cost 0.341727957
Standard Error 58.83252862
Observations 13
Multiple regression equation is:
Sales in year = -70420 + 35 x Year + 0.34 x Marketing Cost
4. Time trends
The Excel TREND function calculates the trend line through a given set of y-values and
(optionally), a given set of x-values. The function then extends the linear trend line to
calculate additional y-values for a further supplied set of new x-values.
The format of the function is:
TREND ( Known_y‘s, [Known_x‘s], New_x‘s, [Const] )
Where the arguments are as follows:
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Known_y‘s - A set of known y-values
[Known_x‘s] - A set of known x-values.
This is an optional argument which, if provided, should have the same
length as the set of Known_y’s
If omitted, the set of [Known_x‘s] takes on the value {1, 2, 3, ...}
New_x‘s - A set of new x-values, for which the function calculates corresponding new
y-values
[Const] - An optional logical argument that determines how the constant ‗b‘ is treated
in the straight-line equation y = mx + b
If Const is TRUE (or if this argument is omitted) the constant b is treated
normally;
If Const is FALSE the constant b is set to 0 in the equation y = mx + b
As the Trend function returns an array of values, it must be entered as an Array Formula.
Array Formulas:
To input an array formula, you need to first highlight the range of cells for the function result.
Type your function into the first cell of the range, and press CTRL-SHIFT-Enter.
Go to the Excel Array Formulas page for more details.
Example
The spreadsheet below shows a simple example of the Excel Trend Function being used to
extend a series of x- and y-values that lie on the straight line y = 2x + 10. These are stored in
cells A2 - B5 and are also shown in the graph.
The Trend function uses the least squares method to find the straight line that has the best fit
for the provided known x- and y- values. In this simple example, the line of best fit is the
straight line y = 2x + 10.
Once Excel has calculated the straight line equation, it can use this to calculate the new y-
values for the provided new x values.
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In this example, the values of the New_x’s are stored in cells A8 - A10 and the Excel Trend
function has been used, in cells B8 - B10, to find the corresponding new y values. The
equation for this, as shown in the formula bar, is :
=TREND (B2:B5, A2:A5, A8:A10)
It is seen that the Trend function in the formula bar is encased in curly braces { }. This
indicates that the function has been input as an Array Formula.
Note that, although the points in the example fit along the straight line y = 2x + 10, this is not
essential. The Excel Trend function will find the line of best fit for any set of values provided
to it.
5. Moving averages
The Moving Average analysis tool projects values in the forecast period, based on the average
value of the variable over a specific number of preceding periods. A moving average provides
trend information that a simple average of all historical data would mask. This example uses
the data for Contoso product 1176 to predict a target inventory level for the new fiscal year.
CHART A TARGET INVENTORY LEVEL
On the Tools menu, click Data Analysis.
In the Data Analysis dialog box, click Moving Average, and then click OK.
The Moving Average dialog box opens.
In the Input Range box, enter a single row or column of data.
In the Interval box, enter the number of values that you want to include in the moving
average. In this example, enter 3, the default interval.
NOTE The interval is the number of data points used to calculate the moving average. The
larger the interval, the smoother the moving average line; the smaller the interval, the more
the moving average is affected by individual data point fluctuations.
In the Output Range box, enter the cell address where you want the results to start.
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Select the Chart Output check box to see a graph comparing the actual and forecasted
inventory levels.
Click OK.
The resulting chart gives a better picture of ideal inventory levels, and with a little fine-
tuning, can show exactly what the optimal monthly ending inventory should be.
ADD DATA LABELS TO A CHART
Double-click the first data point in the Forecast series to open the Format Data Series dialog
box.
On the Data Labels tab, select the Value check box, and then click OK.
Double-click the first data label to open the Format Data Label dialog box.
On the Font tab, set the font size to 8.
On the Number tab, select number from the list on the left.
Set the decimal places to 0.
Click OK.
Your chart now clearly shows your forecasted inventory levels and identifies each month‘s
optimal ending quantity.
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6. Qualitative Delphi method
A panel of experts, each of whom is physically separated from the others and is anonymous,
is asked to respond to a sequential series of questionnaires. After each questionnaire, the
responses are tabulated and the information and opinions of the entire group are made known
to each of the other panel members so that they may revise their previous forecast response.
The process continues until some degree of consensus is achieved.
Nominal group technique
The Nominal Group Technique (NGT), or multi-voting technique, is a methodology for
achieving team consensus quickly when the team is ranking several options or alternatives or
selecting the best choice among them. The method basically consists of having each team
member come up with his or her personal ranking of the options or choices, and collation of
everyone‘s rankings into the team consensus.
Jury of executive opinion
These techniques are often used by committees or panels seeking to develop new ideas or
solve complex problems. They often involve ―brainstorming sessions‖.
It is important in such sessions that any ideas or opinions be permitted to be presented without
regard to its relevancy and without fear of criticism.
Scenario projection
Scenario writing consists of developing a conceptual scenario of the future based on a well
defined set of assumptions. After several different scenarios have been developed, the
decision maker determines which is most likely to occur in the future and makes decisions
accordingly.
Top-Down : Where international and national events affect the future behaviour of local
variables.
Bottom-Up: Where local events affect the future behaviour
of local variables
7. SWOT analysis:
Strengths
Business strengths are its resources and capabilities that can be used as a basis for
developing a competitive-advantage. Examples of such strengths include:
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Patents
Strong brand names.
Good reputation among customers.
Cost advantages from proprietary know-how.
Exclusive access to high grade natural resources.
Favorable access to distribution networks.
Weaknesses
The absence of certain strengths may be viewed as a weakness. For example, each of the
following may be considered weaknesses:
Lack of patent protection.
A weak brand name.
Poor reputation among customers.
High cost structure.
Lack of access to the best natural resources.
Lack of access to key distribution channels.
Opportunities
The external environmental analysis may reveal certain new opportunities for profit and
growth. Some examples of such opportunities include:
An unfulfilled customer need.
Arrival of new technologies.
Loosening of regulations.
Removal of international trade barriers.
Threats
Changes in the external environmental also may present threats to the firm. Some examples of
such threats include:
Shifts in consumer tastes away from the firm‘s products
Emergence of substitute products.
New regulations.
Increased trade barriers
Matching an internal
strength with
opportunity produces
leverage
An environmental
threat to a current
organizational strength
is vulnarability
Organizations that do
not size opportunity
become constrained
A huge problem emerges
when outside influences
attack an organizations
INTERNAL
Strength
Weaknesss
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weakness
8. PEST analysis
The following type of forces influence an organization‘s operating environment:
Pest Factors – These are external forces which the organization does not have direct
control over these factors. PEST is an acronym and each letter represents a type of
factor (Political, Economical Social and Technological).
Micro environmental factors – These are internal factors, which the organization can
control.
PEST & PESTLE analysis
A PEST analysis is used to identify the external forces affecting an organization .This is a
simple analysis of an organization‘s Political, Economical, Social and Technological
environment. A PEST analysis incorporating legal and environmental factors is called a
PESTLE analysis.
Political
Political environment influences organizations in umpteen numbers of ways. Politics could
create advantages and opportunities for organizations. Otherwise they could also influence
obligations and duties on organizations. The Political factors include the following:
Legislations relating to employment, operations etc.
Market regulations
Trade agreements, tariffs or restrictions
Tax levies and tax breaks
Type of government regimes.
Economical
National and global interest rates, fiscal policies, the climate of economic conditions effect
the consumers, suppliers, organizational stakeholders, creditors etc. The economic status
effects employment, spending power and stakeholder‘s confidence. The effect of economic
conditions on the competitors need to be taken into account and responded accordingly.
EXTERNA
L
Opportunity Threats
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Organizations are affected by the world economies and not just by the countries in which they
are based or operate. For example: a global credit crunch originating in the USA contributed
towards the credit crunch in the UK in 2007/08. Cheaper labor in developing countries affects
the competitiveness of products from developed countries. An increase in interest rates in the
USA will affect the share price of UK stocks or adverse weather conditions in India may
affect the price of tea bought in an English café.
A truly global player has to be aware of economic conditions across all borders and needs to
ensure that it employs strategies that protect and promote its business through economic
conditions throughout the world.
Social
Elements within society such as family, friends, colleagues, neighbors, the media etc., affect
our attitudes, interest s and opinions. These forces shape who we are as people, the way we
behave and ultimately what we purchase.
Population and changes in the structure of a population will affect the supply and demand of
goods and services within an economy.
In summary organizations must be able to offer products and services that aim to complement
and benefit people‘s lifestyle and behavior. If organizations do not respond to changes in
society they will lose market share and demand for their product or service.
Technological
Technological advances have greatly changed the manner in which businesses operate.
Organizations use technology in many ways such as Technology infrastructure, Technology
systems, Technology hardware etc.
Technological changes bring about changes in the operating environment; create pressure on
businesses expected results and most importantly impact consumer habits and expectations
which if not taken into account by organizations, may face extinction.
PESTLE
A PEST analysis expanded to incorporate legal and environmental factors is known as a
PESTLE analysis. Legal factors are important as organizations have to work within legislative
frameworks. Legislation can hinder business by placing onerous obligations on organizations.
On the other hand legislation can create market conditions that benefit business.
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9. BCG Matrix BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE
HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970‘s.
According to this technique, businesses or products are classified as low or high performers
depending upon their market growth rate and relative market share.
To understand the Boston Matrix you need to understand how market share and market
growth interrelate.
Market share is the percentage of the total market that is being serviced by your company,
measured either in revenue terms or unit volume terms.
WHY BCG MATRIX? To assess:
Profiles of products/businesses
The cash demands of products
The development cycles of products
Resource allocation and divestment decisions
Relative Market Share RMS = Business unit sales this year
Leading rival sales this year
The higher your market share, the higher proportion of the market you control.
Market growth is used as a measure of a market‘s attractiveness.
MGR = Individual sales - individual sales
this year last year
Individual sales last year
It is a portfolio planning model which is based on the observation that a company‘s business
units can be classified in to four categories:
Stars
Question marks
Cash cows
STRATEGY ProductPriceP
rom
otio
nP
lace
Po
liti
cs
Economy
So
cie
ty
Technology
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Dogs
It is based on the combination of market growth and market share relative to the next best
competitor.
Markets experiencing high growth are ones where the total market share available is
expanding, and there‘s plenty of opportunity for everyone to make money.
STARS High growth, High market share
Stars are leaders in business.
They also require heavy investment, to maintain its large market share.
It leads to large amount of cash consumption and cash generation.
Attempts should be made to hold the market share otherwise the star will become a CASH
COW.
CASH COWS
Low growth, High market share
They are foundation of the company and often the stars of yesterday.
They generate more cash than required.
They extract the profits by investing as little cash as possible
They are located in an industry that is mature, not growing or declining.
DOGS
Low growth, Low market share
Dogs are the cash traps.
Dogs do not have potential to bring in much cash.
Number of dogs in the company should be minimized.
Business is situated at a declining stage.
QUESTION MARKS High growth, Low market share
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Most businesses start of as question marks.
They will absorb great amounts of cash if the market share remains unchanged, (low).
Question marks have potential to become star and eventually cash cow but can also
become a dog.
Investments should be high for question marks
MAIN STEPS OF BCG MATRIX
Identifying and dividing a company into SBU.
Assessing and comparing the prospects of each SBU according to two criteria :
SBU‘S relative market share.
Growth rate OF SBU‘S industry.
Classifying the SBU‘S on the basis of BCG matrix.
Developing strategic objectives for each SBU
BENEFITS
BCG MATRIX is simple and easy to understand.
It helps you to quickly and simply screen the opportunities open to you, and helps you
think about how you can make the most of them.
It is used to identify how corporate cash resources can best be used to maximize a
company‘s future growth and profitability.
LIMITATIONS
BCG MATRIX uses only two dimensions, Relative market share and market growth rate.
Problems of getting data on market share and market growth.
High market share does not mean profits all the time.
Business with low market share can be profitable too.
CONCLUSION
Though BCG MATRIX has its limitations it is one of the most FAMOUS AND SIMPLE
portfolio planning matrix ,used by large companies having multi-products.
(http://www.ppttube.com/presentations/gen_matrix.ppt)
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10. ANSOFF MATRIX
The Ansoff Product-Market Growth Matrix is a marketing tool created by Igor
Ansoff and first published in his article ―Strategies for Diversification‖ in the Harvard
Business Review (1957).
Market penetration (existing markets, existing products): Market penetration occurs
when a company enters/penetrates a market with current products. The best way to
achieve this is by gaining competitors‘ customers (part of their market share). Other
ways include attracting non-users of your product or convincing current clients to use
more of your product/service, with advertising or other promotions. Market
penetration is the least risky way for a company to grow.
Product development (existing markets, new products): A firm with a market for its
current products might embark on a strategy of developing other products catering to
the same market (although these new products need not be new to the market; the
point is that the product is new to the company). For example, McDonald‘s is always
within the fast-food industry, but frequently markets new burgers. Frequently, when a
firm creates new products, it can gain new customers for these products. Hence, new
product development can be a crucial business development strategy for firms to stay
competitive.
Market development (new markets, existing products): An established product in the
marketplace can be tweaked or targeted to a different customer segment, as a strategy
to earn more revenue for the firm. For example, Lucozade was first marketed for sick
children and then rebranded to target athletes. This is a good example of developing a
new market for an existing product. Again, the market need not be new in itself, the
point is that the market is new to the company.
Diversification (new markets, new products): Virgin Cola, Virgin Megastores, Virgin
Airlines, Virgin Telecommunications are examples of new products created by
the Virgin Group of UK, to leverage the Virgin brand. This resulted in the company
entering new markets where it had no presence before.
The matrix illustrates, in particular, that the element of risk increases the further the strategy
moves away from known quantities - the existing product and the existing market. Thus,
product development (requiring, in effect, a new product) and market extension (a new
market) typically involve a greater risk than ‗penetration‘ (existing product and existing
market); and diversification (new product and new market) generally carries the greatest risk
of all. In his original work [1]
, which did not use the matrix form, Igor Ansoff stressed that the
diversification strategy stood apart from the other three.
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While the latter are usually followed with the same technical, financial, and merchandising
resources which are used for the original product line, diversification usually requires new
skills, new techniques, and new facilities. As a result it almost invariably leads to physical and
organizational changes in the structure of the business which represent a distinct break with
past business experience.
11. COUNTRY WISE RELATIVE ENVIRONMENTAL
ANALYSIS FACTORS IMPORTANCE SUB FACTORS COUNTRY A COUNTRY B COUNTRY C COUNTRY D COUNTRY E IMPORTANCE
Government Policies 4 3 3 5 2 0.5
Regulatory 4 4 3 4 3 0.3
Trading Policies 3 3 2 3 2 0.2
GDP (PPP) 2 2 5 3 1 0.1
Inflation 4 1 3 5 1 0.1
Annual Imports 5 4 1 3 1 0.4
CB Discount Rate 3 4 2 3 1 0.1
GDP (Per Capita) 5 2 1 3 1 0.3
Population 5 3 1 2 1 0.2
Pharma Market 3 4 5 3 1 0.5
Therapeutic Segments 3 3 5 4 4 0.3
Pharma Market Growth Rate 3 2 5 2 1 0.5
Manufacturing Capability 5 2 1 1 1 0.2
Pharma Infrastructure 3 3 1 5 2 0.3
PO
LIT
ICA
LE
CO
NO
MIC
AL
SO
CIA
LT
EC
HN
OL
OG
ICA
L
0.2
0.4
0.2
0.2
12. COUNTRY WISE RELATIVE COMPETITIVE ANALYSIS FACTORS IMPORTANCE SUB FACTORS COUNTRY A COUNTRY B COUNTRY C COUNTRY D COUNTRY E IMPORTANCE
Fragmented 4 3 3 5 2 0.2
Organized 4 4 3 4 3 0.5
Extensive 3 3 2 3 2 0.3
Ethical 2 2 5 3 1 0.4
Pharmacies 4 1 3 5 1 0.2
Sales Personnel 5 4 1 3 1 0.2
Low 5 3 1 2 1 0.2
High 3 4 5 3 1 0.5
Optimum 3 3 5 4 4 0.3
Competition 3 2 5 2 1 0.5
Packing 5 2 1 1 1 0.2
Manufacturing 3 3 1 5 2 0.3PR
OD
UC
T 0.3
PL
AC
E 0.2
PR
OM
OT
ION
0.2
PR
ICE 0.2
COUNTRY ENVORNMENTAL ANALYSIS COMPETITIVE ANALYSIS TOTAL
A 3.88 3.76 7.64
B 2.78 2.15 4.93
C 2.60 2.84 5.44
D 3.10 2.57 5.67
E 1.50 1.43 2.93
Market Attractiveness Matrix Attractiveness Results
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13. PORTERS FIVE FORCES
Description:
Michael Porter‘s innovative research in the 1980‘s changed managers‘ perceptions of their
own industry‘s importance as a factor for their company‘s strategy. Business unit managers
would now have to study their industry‘s characteristics since an industry‘s structure
determines its relative economic attractiveness and hence, the profit potential of all companies
within that particular industry.
Ma
rke
t att
ra
ctiv
en
es
s
Competitive strength
Leader Try harder Double or Quit
Growth Proceed with care
Cash generator Divestment
Phased withdrawl
Phased withdrawl
Co
mp
an
y c
om
pe
titi
ve
ne
ss
Country attractiveness
5 3.3 1.7 0
5
3.3
1.7
0
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Prior to Porter‘s publication, economists studying Industrial Organisation explained varying
levels of profitability between industries on their structural differences. Porter focused on
private policy rather than on public policy, that is, how to maximize profits instead of how to
locate excess profits. Industry as a factor changed almost overnight from a given to an
important variable in a firm‘s strategic decision-making process. Porter made it clear that
choosing a firm‘s relative competitive position within a selected industry is a decision of
secondary importance.
Porter‘s framework consists of five fundamental competitive forces:
1. Entry of competitors
Assessing the ability of new entrants to start operations and the structural barriers they must
overcome;
2. Threat of substitutes
Assessing the ability of new products with superior characteristics to replace existing
product(s) or service(s);
3. Bargaining power of buyers
Assessing the relative strength and number of buyers;*
4. Bargaining power of suppliers
Assessing the relative strength and number of sellers;*
5. Rivalry among the existing players
Assessing the relative competitive strength of rival firms.*
Concentration ratio (CR): the percent of market share held by the four largest firms
within an industry is frequently used as a leading measure. A high CR means that few
firms hold a large market share, are less competitive, and create a less competitive,
more monopolistic landscape. Less competition leads to higher profit margins. A low
concentration ratio indicates that an industry is characterized by many rivals, none of
which has a significant market share. These fragmented markets are said to be
competitive.
Pros:
The model helps to understand how value is shared among actors, and provides insight into
redistribution of profits.
The model takes a broader view on competition than only a firm‘s existing competing
firms.
The business unit level provides a context beyond a single product or range of products.
Porter‘s model emphasizes an outside analysis of the organization‘s environment over an
internal focus.
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Cons:
The model assumes a given state of affairs, and does not apply well to industries in
turmoil.
The analysis is reactive and does not include other perspectives such as the resource based
view in which organizations can reshape an industry based on existing core competences
and intrinsic will power.
The analysis is based on the assumption that firms strive only for a competitive advantage
over their rivals and exclude other motivations.
The analysis is based on the assumption that firms strive only for a competitive advantage
over their rivals and exclude other motivations.
Buyers, suppliers and (new) competitors are assumed unrelated and do not operate in
networks outside of the industry under observation.
References:
Competitive Strategy: Techniques for Analyzing Industries and Competitors
Michael E. Porter 1980 Free Press United States ISBN 0684841487
Strategy and the business landscape
Pankaj Ghemawat 2001 Prentice Hall United States ISBN 0130289760
14. Linear Programming (LP)
A Linear Programming model seeks to maximize or minimize a linear function, subject to
a set of linear constraints.
The linear model consists of the following
components:
A set of decision variables.
An objective function.
A set of constraints.
The Importance of Linear Programming
There are efficient solution techniques that solve linear programming models.
The output generated from linear programming packages provides useful ―what if‖
analysis.
Assumptions of the linear programming model
The parameter values are known with certainty.
The objective function and constraints exhibit constant returns to scale.
There are no interactions between the decision variables (the additively
assumption).
The Continuity assumption: Variables can take on any value within a given
feasible range
The Galaxy Industries Production Problem – A Prototype Example
Galaxy manufactures two toy doll models:
Space Ray.
Zapper.
Resources are limited to
1000 pounds of special plastic.
40 hours of production time per week.
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The Galaxy Industries Production Problem – A Prototype Example
Marketing requirement
Total production cannot exceed 700 dozens.
Number of dozens of Space Rays cannot exceed number of dozens of
Zappers by more than 350.
Technological input
Space Rays requires 2 pounds of plastic and 3 minutes of
labor per dozen.
Zappers requires 1 pound of plastic and 4 minutes of labor
per dozen.
The Galaxy Industries Production Problem – A Prototype Example
The current production plan calls for:
Producing as much as possible of the more profitable product, Space Ray
($8 profit per dozen).
Use resources left over to produce Zappers ($5 profit per dozen), while
remaining within the marketing guidelines.
The current production plan consists of:
Space Rays = 450 dozen
Zapper = 100 dozen
Profit = $4100 per week [8(450) + 5(1000]
Management is seeking a production schedule that will increase the company’s
profit.
A linear programming model can provide an insight and an intelligent solution to
this problem.
The Galaxy Linear Programming Model
Decisions variables::
X1 = Weekly production level of Space Rays (in dozens)
X2 = Weekly production level of Zappers (in dozens).
Objective Function:
Weekly profit, to be maximized
Max 8X1 + 5X2 (Weekly profit)
Subject to
2X1 + 1X2 ≤ 1000 (Plastic)
3X1 + 4X2 ≤ 2400 (Production Time)
X1 + X2 ≤ 700 (Total production)
X1 - X2 ≤ 350 (Mix)
Xj> = 0, j = 1,2 (No negativity)
The Graphical Analysis of Linear Programming
The set of all points that satisfy all the constraints of the model is called a FFEEAASSIIBBLLEE
RREEGGIIOONN Using a graphical presentation we can represent all the constraints, the objective function,
and the three types of feasible points.
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Graphical Analysis – the Feasible Region
Graphical Analysis – the Feasible Region
The non-negativity constraints
X2
X1
1000
500
Feasible
X2
Infeasible
Production
Time
3X1+4X2 2400
Total production constraint:
X1+X2 700 (redundant)500
700
The Plastic constraint
2X1+X2 1000
X1
700
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Graphical Analysis – the Feasible Region
The search for an optimal solution
Summary of the optimal solution
Space Rays = 320 dozen
1000
500
Feasible
X2
Infeasible
Production
Time
3X1+4X22400
Total production constraint:
X1+X2 700 (redundant)500
700
Production mix
constraint:
X1-X2 350
The Plastic constraint
2X1+X2 1000
X1
700
• There are three types of feasible points
Interior points. Boundary points. Extreme points.
Start at some arbitrary profit, say profit = $2,000...
Then increase the profit, if possible...
...and continue until it becomes infeasible
Profit =$4360
500
700
1000
500
X2
X1
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Zappers = 360 dozen
Profit = $4360
This solution utilizes all the plastic and all the production hours.
Total production is only 680 (not 700).
Space Rays production exceeds Zappers production by only 40 dozens.
Extreme points and optimal solutions
If a linear programming problem has an optimal solution, an extreme point is optimal.
Multiple optimal solutions
Any weighted average of optimal solutions is also an optimal solution.
For multiple optimal solutions to exist, the objective function must be parallel to one of
the constraints
The Role of Sensitivity Analysis of the Optimal Solution
Is the optimal solution sensitive to changes in input parameters?
Possible reasons for asking this question:
Parameter values used were only best estimates.
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Dynamic environment may cause changes.
―What-if‖ analysis may provide economical and operational information.
Sensitivity Analysis of Objective Function Coefficients
Range of Optimality
The optimal solution will remain unchanged as long as
An objective function coefficient lies within its range of optimality there are no
changes in any other input parameters.
The value of the objective function will change if the coefficient multiplies a variable
whose value is nonzero.
Sensitivity Analysis of Objective Function Coefficients.
Reduced cost
Assuming there are no other changes to the input parameters, the reduced cost for a
variable Xj that has a value of ―0‖ at the optimal solution is:
The negative of the objective coefficient increase of the variable Xj (- j) necessary
for the variable to be positive in the optimal solution
Alternatively, it is the change in the objective value per unit increase of Xj.
Complementary slackness
At the optimal solution, either the value of a variable is zero, or its reduced cost is 0.
Sensitivity Analysis of Right-Hand Side Values
In sensitivity analysis of right-hand sides of constraints we are interested in the
following questions:
Keeping all other factors the same, how much would the optimal value of the
objective function (for example, the profit) change if the right-hand side of a
constraint changed by one unit?
For how many additional or fewer units will this per unit change be valid?
Any change to the right hand side of a binding constraint will change the optimal
solution.
Any change to the right-hand side of a non-binding constraint that is less than its slack
or surplus, will cause no change in the optimal solution.
500
1000
400 600 800 X1
Range of optimality: [3.75, 10]
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Shadow Prices
Assuming there are no other changes to the input parameters, the change to the
objective function value per unit increase to a right hand side of a constraint is called
the ―Shadow Price‖
Range of Feasibility
Assuming there are no other changes to the input parameters, the range of feasibility is
The range of values for a right hand side of a constraint, in which the shadow prices
for the constraints remain unchanged.
In the range of feasibility the objective function value changes as follows:
Change in objective value = [Shadow price][Change in the right hand side value]
1000
500
X2
X1
500
When more plastic becomes available (the
plastic constraint is relaxed), the right hand
side of the plastic constraint increases.
Production time
constraint
Maximum profit = $4360
Maximum profit = $4363.4
Shadow price =
4363.40 – 4360.00 = 3.40
The Plastic
constraint
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1000
500
X2
X1
500
The Plastic
constraint
Production time
constraint
Note how the profit increases
as the amount of plastic
increases.
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The correct interpretation of shadow prices
Sunk costs: The shadow price is the value of an extra unit of the resource, since the
cost of the resource is not included in the calculation of the objective function
coefficient.
Included costs: The shadow price is the premium value above the existing unit value
for the resource, since the cost of the resource is included in the calculation of the
objective function coefficient.
Other Post - Optimality Changes
Addition of a constraint.
Deletion of a constraint.
Addition of a variable.
Deletion of a variable.
Changes in the left - hand side coefficients.
Using Excel Solver to Find an Optimal Solution and Analyze Results
To see the input screen in Excel click Galaxy.xls
Click Solver to obtain the following dialog box.
1000
500
X2
X1
500
Less plastic becomes available (the
plastic constraint is more restrictive).
The profit decreases
A new active
constraint
Infeasible
solution
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Using Excel Solver – Optimal Solution
38
Equal To:
By Changing cellsThese cells contain
the decision variables$B$4:$C$4
To enter constraints click…
Set Target cell $D$6This cell contains
the value of the
objective function
$D$7:$D$10 $F$7:$F$10
All the constraints
have the same direction,
thus are included in
one “Excel constraint”.
Equal To:
$D$7:$D$10<=$F$7:$F$10
By Changing cellsThese cells contain
the decision variables$B$4:$C$4
Set Target cell $D$6This cell contains
the value of the
objective function
Click on „Options‟
and check „Linear
Programming‟ and
„Non-negative‟.
Equal To:
$D$7:$D$10<=$F$7:$F$10
By Changing cells$B$4:$C$4
Set Target cell $D$6
Space Rays Zappers
Dozens 320 360
Total Limit
Profit 8 5 4360
Plastic 2 1 1000 <= 1000
Prod. Time 3 4 2400 <= 2400
Total 1 1 680 <= 700
Mix 1 -1 -40 <= 350
GALAXY INDUSTRIES
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Using Excel Solver –Answer Report
LP Model Formulation
Decision variables
mathematical symbols representing levels of activity of an operation
Objective function
a linear relationship reflecting the objective of an operation
most frequent objective of business firms is to maximize profit
most frequent objective of individual operational units (such as a production or packaging
department) is to minimize cost
Constraint
a linear relationship representing a restriction on decision making
Space Rays Zappers
Dozens 320 360
Total Limit
Profit 8 5 4360
Plastic 2 1 1000 <= 1000
Prod. Time 3 4 2400 <= 2400
Total 1 1 680 <= 700
Mix 1 -1 -40 <= 350
GALAXY INDUSTRIES
Solver is ready to provide
reports to analyze the
optimal solution.
Microsoft Excel 9.0 Answer Report
Worksheet: [Galaxy.xls]Galaxy
Report Created: 11/12/2001 8:02:06 PM
Target Cell (Max)
Cell Name Original Value Final Value
$D$6 Profit Total 4360 4360
Adjustable Cells
Cell Name Original Value Final Value
$B$4 Dozens Space Rays 320 320
$C$4 Dozens Zappers 360 360
Constraints
Cell Name Cell Value Formula Status Slack
$D$7 Plastic Total 1000 $D$7<=$F$7 Binding 0
$D$8 Prod. Time Total 2400 $D$8<=$F$8 Binding 0
$D$9 Total Total 680 $D$9<=$F$9 Not Binding 20
$D$10 Mix Total -40 $D$10<=$F$10 Not Binding 390
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Using Excel Solver –Sensitivity Report
Models without Unique Optimal Solutions
Infeasibility: Occurs when a model has no feasible point.
Unboundness: Occurs when the objective can become infinitely large (max), or
infinitely small (min).
Alternate solution: Occurs when more than one point optimizes the objective
function
Microsoft Excel Sensitivity Report
Worksheet: [Galaxy.xls]Sheet1
Report Created:
Adjustable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$B$4 Dozens Space Rays 320 0 8 2 4.25
$C$4 Dozens Zappers 360 0 5 5.666666667 1
Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$D$7 Plastic Total 1000 3.4 1000 100 400
$D$8 Prod. Time Total 2400 0.4 2400 100 650
$D$9 Total Total 680 0 700 1E+30 20
$D$10 Mix Total -40 0 350 1E+30 390
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Unbounded solution
1
No point, simultaneously,
lies both above line and
below lines and
.
1
2 32
3
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Solver – An Alternate Optimal Solution
Solver does not alert the user to the existence of alternate optimal solutions.
Many times alternate optimal solutions exist when the allowable increase or allowable
decrease is equal to zero.
In these cases, we can find alternate optimal solutions using Solver by the following
procedure:
Observe that for some variable Xj the
Allowable increase = 0, or
Allowable decrease = 0.
Add a constraint of the form:
Objective function = Current optimal value.
If Allowable increase = 0, change the objective to Maximize Xj
If Allowable decrease = 0, change the objective to Minimize Xj
Cost Minimization Diet Problem
Mix two sea ration products: Texfoods, Calration.
Minimize the total cost of the mix.
Meet the minimum requirements of Vitamin A, Vitamin D, and Iron.
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Cost Minimization Diet Problem
Summary of the optimal solution
Texfood product = 1.5 portions (= 3 ounces)
Calration product = 2.5 portions (= 5 ounces)
Cost =$ 2.15 per serving.
The minimum requirement for Vitamin D and iron are met with no surplus.
The mixture provides 155% of the requirement for Vitamin A.
• Decision variables
– X1 (X2) -- The number of two-ounce portions of
Texfoods (Calration) product used in a serving.
• The ModelMinimize 0.60X1 + 0.50X2
Subject to
20X1 + 50X2 100 Vitamin A
25X1 + 25X2 100 Vitamin D
50X1 + 10X2 100 Iron
X1, X2 0
Cost per 2 oz.
% Vitamin A
provided per 2 oz.% required
10
2 4 5
Feasible Region
Vitamin “D” constraint
Vitamin “A” constraint
The Iron constraint
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15. PERT / CPM
Project
A project is a temporary endeavor involving a connected sequence of activities and a range of
resources, which is designed to achieve a specific and unique outcome and which operates
within time, cost and quality constraints and which is often used to introduce change
Characteristic of a project
A unique, one-time operational activity or effort
Requires the completion of a large number of interrelated activities
Established to achieve specific objective
Resources, such as time and/or money, are limited
Typically has its own management structure
Need leadership
Examples
constructing houses, factories, shopping malls, athletic stadiums or arenas
developing military weapons systems, aircrafts, new ships
launching satellite systems
constructing oil pipelines
developing and implementing new computer systems
planning concert, football games, or basketball tournaments
introducing new products into market
What is project management
The application of a collection of tools and techniques to direct the use of diverse
resources towards the accomplishment of a unique, complex, one time task within
time, cost and quality constraints.
Its origins lie in World War II, when the military authorities used the techniques of
operational research to plan the optimum use of resources.
One of these techniques was the use of networks to represent a system of related
activities
Project Management Process
Project planning
Project scheduling
Project control
Project team
made up of individuals from various areas and departments within a company
Matrix organization
– a team structure with members from functional areas, depending on skills required
Project Manager
– most important member of project team
Scope statement
– a document that provides an understanding, justification, and expected result of
a project
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Statement of work
– written description of objectives of a project
Organizational Breakdown Structure
– a chart that shows which organizational units are responsible for work items
Responsibility Assignment Matrix
Shows who is responsible for work in a project
Project Scheduling and Control Techniques
Gantt Chart
Critical Path Method (CPM)
Program Evaluation and Review Technique (PERT)
Gantt chart
Graph or bar chart with a bar for each project activity that shows passage of time
Provides visual display of project schedule
History of CPM/PERT
Critical Path Method (CPM)
E I Du Pont de Nemours & Co. (1957) for construction of new chemical plant and
maintenance shut-down
Deterministic task times
Activity-on-node network construction
Repetitive nature of jobs
Project Evaluation and Review Technique (PERT)
U S Navy (1958) for the POLARIS missile program
Multiple task time estimates (probabilistic nature)
Activity-on-arrow network construction
Non-repetitive jobs (R & D work)
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Project Network
Event
Signals the beginning or ending of an activity
Designates a point in time
Represented by a circle (node)
Network
Shows the sequential relationships among activities using nodes and arrows
Activity-on-node (AON): Nodes represent activities, and arrows show precedence
relationships
Activity-on-arrow (AOA): Arrows represent activities and nodes are events for points
in time
AOA Project Network
AON Project Network
3
2 0
1
3
1 1
11 2 4 6 7
3
5
Lay
foundation
Design house
and obtain
financing
Order and
receive
materials
Dummy
Finish
work
Select
carpet
Select
paint
Build
house
darla/smbs/vit 16
13
22
43
31 5
1
61
71Start
Design house and
obtain financing
Order and receive
materialsSelect paint
Select carpet
Lay foundations Build house
Finish work
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Situations in network diagram
Concurrent Activities
AB
C
A must finish before either B or C can start
A
B
C both A and B must finish before C can start
D
C
B
Aboth A and C must finish before either of B
or D can start
A
C
B
D
Dummy
A must finish before B can start
both A and C must finish before D can start
2 3
Lay foundation
Order material
(a) Incorrect precedence
relationship
(b) Correct precedence
relationship
3
42
DummyLay
foundation
Order material
1
2 0
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Network example
Illustration of network analysis of a minor redesign of a product and its associated packaging.
The key question is: How long will it take to complete this project ?
For clarity, this list is kept to a minimum by specifying only immediate relationships that
is relationships involving activities that “occur near to each other in time”.
Questions to prepare activity network
Is this a Start Activity?
Is this a Finish Activity?
What Activity Precedes this?
What Activity Follows this?
What Activity is Concurrent with this?
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Path
A connected sequence of activities leading from the starting event to the ending event
Critical Path
The longest path (time); determines the project duration
Critical Activities
All of the activities that make up the critical path
Forward Pass
Earliest Start Time (ES)
earliest time an activity can start
ES = maximum EF of immediate predecessors
Earliest finish time (EF)
earliest time an activity can finish
earliest start time plus activity time
EF= ES + t
Backward Pass
Latest Start Time (LS)
Latest time an activity can start without delaying critical path time
LS= LF - t
Latest finish time (LF)
latest time an activity can be completed without delaying critical path time
LS = minimum LS of immediate predecessors
PERT
PERT is based on the assumption that an activity‘s duration follows a probability
distribution instead of being a single value
Three time estimates are required to compute the parameters of an activity‘s duration
distribution:
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pessimistic time (tp ) - the time the activity would take if things did not go well
most likely time (tm ) - the consensus best estimate of the activity‘s duration
optimistic time (to ) - the time the activity would take if things did go well
PERT analysis
Draw the network.
Analyze the paths through the network and find the critical path.
The length of the critical path is the mean of the project duration probability
distribution which is assumed to be normal
The standard deviation of the project duration probability distribution is computed by
adding the variances of the critical activities (all of the activities that make up the
critical path) and taking the square root of that sum
Probability computations can now be made using the normal distribution table.
Probability computation
Determine probability that project is completed within specified time
Where,
= tp = project mean time
σ = project standard mean time
x = (proposed ) specified time
Normal Distribution of Project Time
= tp Time
Z
Probability
Mean (expected time): te =tp + 4 tm + to
6
Variance: Vt =2 =tp - to
6
2
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PERT Example
PERT Network
Immed. Optimistic Most Likely Pessimistic
Activity Predec. Time (Hr.) Time (Hr.) Time (Hr.)
A -- 4 6 8
B -- 1 4.5 5
C A 3 3 3
D A 4 5 6
E A 0.5 1 1.5
F B,C 3 4 5
G B,C 1 1.5 5
H E,F 5 6 7
I E,F 2 5 8
J D,H 2.5 2.75 4.5
K G,I 3 5 7
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A
D
C
B
F
E
G
I
H
K
J
Activity Expected Time Variance
A 6 4/9
B 4 4/9
C 3 0
D 5 1/9
E 1 1/36
F 4 1/9
G 2 4/9
H 6 1/9
I 5 1
J 3 1/9
K 5 4/9
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What if activity times are variable?
a optimistic time
m most likely time
b pessimistic time
t = E(T) expected time = (a + 4m + b)/6
V(T) variance = (b - a)2/36
CPM analysis
Draw the CPM network
Analyze the paths through the network
Determine the float for each activity
Compute the activity‘s float
o float = LS - ES = LF - EF
Float is the maximum amount of time that this activity can be delay in its completion
before it becomes a critical activity, i.e., delays completion of the project
Find the critical path is that the sequence of activities and events where there is no
―slack‖ i.e.. Zero slack
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Longest path through a network
Find the project duration is minimum project completion time
CPM Network
ES and EF Times
a, 6
f, 15
b, 8
c, 5
e, 9
d, 13
g, 17 h, 9
i, 6
j, 12
0 6
0 8
0 5
a, 6
f, 15
b, 8
c, 5
e, 9
d, 13
g, 17 h, 9
i, 6
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ES and EF Times
f, 15
b, 8
c, 5
e, 9
d, 13
g, 17 h, 9
j, 12
0 6
0 8
0 5
5 14
8 21 21 33
6 23 21 30
23 29
6 21
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LS and LF Times
Critical Path
a, 6
f, 15
c, 5
e, 9
d, 13
g, 17
h, 9
i, 6
j, 12
0 6
0 8
0 5
5 14
8 21 21 33
6 23
21 30
23
6 21
4 10
0 8
7 12
12 21
21 33
27
8 21
27
24 33
18 24
a, 6
f, 15
b, 8
c, 5
e, 9
d, 13
g, 17 h, 9
i, 6
j, 12
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16. Negotiation, and Communication skills
Negotiation:
Definition:
The word ―negotiation‖ comes from the Latin expression, ―negotiatus‖, which is the past
participle of the word negotiare. Negotiare means ―to carry on business‖. ―Negotium‖ means
literally ―not leisure‖.
Negotiation is the primary method of resolving disputes. Negotiation is a dialogue intended
to produce an agreement for individual or collective advantage, or to skillfully man oeuvre
outcomes to satisfy various interests.
Importance of negotiation:
In international Pharma business, negotiation is important to establish the internal system
(structure, people, functions, plans, measures, etc), and the organization‘s relation to the
external system (markets, suppliers, technology, etc). Negotiation is also essential to optimize
the performance of activities internally and externally (principally through communication, by
people).
Negotiators:
Most of us are either hard negotiators or soft negotiators. The soft negotiator avoids personal
conflicts and therefore tends to concede in order to reach a peaceful agreement. However, this
generally results in the nasty feeling of being taken advantage of. The hard negotiator
considers every situation as a battle of the wills to be won by the more persistent party that
takes on the more extreme position. Unfortunately, this often ends in getting an equally harsh
response, resources run out and the relations with the other party deteriorate.
The third is ―Principled Negotiator‖. This technique resolves conflicts based on relevance and
factual contents rather than in a haggling process. The approach focuses on mutual benefits
and in case of conflicting interests, finding a solution based on fair principles which are
independent of the intentions of each of the parties.
Principles of successful negotiation: 1. Separate the problem from the people and people from the problem.
All the negotiations involve human beings. Humans are motivated by emotions and value,
have conflicting points of view and are not necessarily predictable. Hence let not your
personal relationships interfere with factual debates when negotiating. First understand that
your counterpart as a human being. Prevent different ideas, emotions or misunderstandings
from standing in the way of a good, appropriate negotiation outcome. When the ideas are
not precise, specify them. When emotions boil over, find the ways to lower the level of
agitation.
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When conflicts occur due to misunderstandings, improve the communication.
1. Put yourself in the shoes of your counterpart. Try to understand your counterpart‘s
thinking and point of view.
2. Discuss the ideas and expectations of the both the parties.
3. Do not pass on the buck to your counterpart for your problems.
4. Ensure active participation of your counterpart in the negotiation process.
5. Base your suggestions on the value system of your partner. Do not let your partner
loose face.
6. Show articulated emotions and justify.
7. Allow your counterpart to let off steam. Avoid emotional outbursts.
8. Be careful with your body language. Respect the cultural differences.
9. Listen carefully to what your counterpart says. Do not interrupt and argue.
10. Speak simple and clearly.
11. Talk about yourself, not about the other party.
12. Know your counterpart well. Strengths, weaknesses, likes, dislikes etc. Keep up
active relationship.
2. Do not focus on positions. Focus on interests.
Look beyond the words your counterpart. Recognize his interests and motives.
Try to answer the question why? Talk about the interests. Find the solution. Talk about
your interest. Make your counterpart aware of your problem. Acknowledge your partner‘s
interests. Look ahead. Not back. Never dwell on the past. Find what your partner wants to
achieve in the future and show that the negotiated solution solves the problem.
3. Develop mutually beneficial alternatives. Take all the partners into account.
Most people are determined that know the answer to the conflict and that their solution to
be accepted. Unfortunately this is somewhat premature and often gets into creative
resolution that would be potentially benefit all the parties involved.
Keep an open mind always. Be creative to develop options.
1. Separate the process of finding the options from evaluating the options.
2. Find all possible options.
3. Evaluate the options in terms of benefits to all the parties involved.
4. Develop proposals that will make the other party accept the decision easier.
5. Brainstorm. Conceive as many options as possible.
6. Rationalize the assumptions. Drive your partner to make acceptable and beneficial
solutions.
7. Adopt and modify solutions of similar conflicts.
4. Formulate collective objective criteria to evaluate the outcome of the negotiation.
1. Identify the objective criteria and procedures.
2. Convert every dispute into facts, evidence and assumptions in search for objective
criteria.
3. Produce sound arguments based on the objective criteria
4. Never give in to any kind of pressure, only accept (sensible) principles.
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5. Distinctive negotiation behaviors of 15 cultural groups
Following cultural differences are worthwhile to be taken into consideration.
Japan. Their style of interaction is among the least aggressive (or most polite). Threats,
commands, and warnings appear to be de-emphasized. Their polite conversational style is
accompanied by infrequent use of no and you and facial gazing, as well as more frequent
silent periods.
Korea. Korean negotiators use considerably more punishments and commands than did
the Japanese. Koreans used the word no and interrupted more than three times as
frequently as the Japanese. Moreover, no silent periods occurred between Korean
negotiators.
China (Northern). Remarkable in the emphasis on asking questions (34 percent).
Indeed, 70 percent of the statements made by the Chinese negotiators were classified as
information-exchange tactics. Other aspects of their behavior were quite similar to the
Japanese, particularly the use of no and you and silent periods.
Taiwan. Quite different from that in China and Japan but similar to that in Korea.
Exceptional in the time of facial gazing—on the average, almost 20 of 30 minutes. Ask
fewer questions and provide more information (self-disclosures) than did any of the other
Asian groups.
Russia. The Russians‘ style is quite different from that of any other European group and
is quite similar in many respects to the style of the Japanese. Use no and you infrequently
and use the most silent periods of any group.
Israel. Lowest percentage of self-disclosures and hold their cards relatively closely. Use
the highest percentages of promises and recommendations. Use persuasive strategies
unusually heavily. The Israeli negotiators interrupt one another much more frequently
than negotiators from any other group. They are nonverbal and ―pushy‖ stereotypes.
Germany. The Germans were exceptional in the high percentage of self-disclosures (47
percent) and the low percentage of questions (11 percent).
United Kingdom. British people believe that most British negotiators have a strong
sense of the right way to negotiate and the wrong. Protocol is of great importance. Some
cultures may consider the British negotiation style as extremely cold and arrogant.
Spain. Spaniards use the highest percentage of commands (17 percent) of any of the
groups and gave comparatively little information (self-disclosures, only 34 percent).
Moreover, they interrupted one another more frequently than any other group, and they
use the terms no and you very frequently.
France. The style of the French negotiators is perhaps the most aggressive of all the
groups. In particular, they use the highest percentage of threats and warnings (together, 8
percent). They also use interruptions, facial gazing, and no and you very frequently
compared with the other groups,
Brazil. The Brazilian businesspeople, like the French and Spanish, are quite aggressive.
They use the second-highest percentage of commands of all the groups. On average, the
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Brazilians say the word no 42 times, you 90 times, and touch one another on the arm
about 5 times during 30 minutes of negotiation. Facial gazing is also high.
Mexico. Both verbal and nonverbal behaviors are quite different than those of their Latin
American (Brazilian) or continental (Spanish) cousins. Indeed, Mexicans answer the
telephone with the much less demanding bueno (short for ―good day‖). In many respects,
the Mexican behavior is very similar to that of the negotiators from the United States.
French-Speaking Canada. The French-speaking Canadians behave quite similarly to
their continental cousins. Like the negotiators from France, they too use high percentages
of threats and warnings, and even more interruptions and eye contact. Such an aggressive
interaction style would not mix well with some of the more low-key styles of some of the
Asian groups or with English speakers, including English-speaking Canadians.
English-Speaking Canada. The Canadians who speak English as their first language use
the lowest percentage of aggressive persuasive tactics (threats, warnings, and
punishments totaled only 1 percent) of all 15 groups. With respect to international
negotiations, the English-speaking Canadians used noticeably more interruptions and
no‘s than negotiators from either of Canada‘s major trading partners, the United States
and Japan.
United States. Like the Germans and the British, the Americans fall in the middle of
most continua. They do interrupt one another less frequently than all the others, but that
was their sole distinction.
―The Mediterranean culture is altogether warmer. Warm greetings and social aspects.
Exuberant uses of postures and gestures. Difficulty in pinning discussions down to
particular deals or particular phases of negotiation.
In some regions, deals need to be ‗lubricated‘. Indeed, this question of ‗lubrication‘ is
central to the cultures of some Mediterranean countries. It is seen as a normal practice
and does not have the repulsive character of ‗bribery‘.
Communication skills:
In Pharma Business, like in any other business communication skills are very important to be
successful.
In Pharma business we must be capable to aptly encode the message we want to convey and
understand the messages we receive and decode. Following are the steps in the
communication process:
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SOURCE ENCODING CHANNEL DECODING RECEIVERMSG MSG MSG MSG
FEEDBACK
We shall also discuss about the following communications skills.
1. Critical Reasoning
2. Reading apprehension
3. Problem solving
4. Business English
We start with a look at some of the key ideas behind successful communication, and offer a
brief quiz that helps you evaluate how effectively you communicate, so that you can identify
the areas you should focus on for improvement.
Statement Not
at all Rarely
Some
times Often
Very
Often
1 I anticipate and predict possible causes of
confusion, and I deal with them up front.
2 In my written communication like memo, email, or
other document, I give all of the background
information and detail I can to make sure that my
message is understood.
3 When I cannot understand something, I tend to
keep this to myself and figure it out later.
4 Sometimes I am surprised to find that people cannot
understand what I say.
5 I tend to say what I think, without worrying about
how the other person perceives it. I assume that
we‘ll be able to work it out later.
6 When I talk to people, I try to see their perspective.
7 I always use email or blackberry to communicate
complex issues with people. It‘s quick and efficient.
8 When I finish writing a report, memo, or email, I
scan it quickly for typos and so forth, and then send
it off right away.
9 During the discussion, I pay lot of attention to the
body language of the participants.
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10 I often use graphical methods to help express my
ideas.
11 Before I communicate, I think about what the other
person needs to know, and how I should.
12 When someone‘s talks to me, I think about what I
would say next to make sure I get my point across
correctly.
13 Before I send a message, I think and decide the best
way to communicate it (in person, over the phone,
in a newsletter, via memo, and so on).
14 I help people to understand the underlying concepts
behind the point I‘m discussing to reduce
misconceptions and increase understanding.
15 I consider cultural barriers when planning my
communications.
Total = 75
Score Interpretation
Score Comment
56-75
Excellent! You understand your role as a communicator, both when you send
messages, and when you receive them. You anticipate problems, and you
choose the right ways of communicating. People respect you for your ability
to communicate clearly, and they appreciate your listening skills.
36-55
You‘re a capable communicator, but you sometimes experience
communication problems. Take the time to think about your approach to
communication, and focus on receiving messages effectively, as much as
sending them. This will help you improve.
15-35
You need to keep working on your communication skills. You are not
expressing yourself clearly, and you may not be receiving messages correctly
either. The good news is that, by paying attention to communication, you can
be much more effective at work, and enjoy much better working relationships!
The rest of this article will direct you to some great tools for improving your
communication skills.
Critical Reasoning
In carrying out business development functions, we often come across statements, arguments,
facts, assumptions conveyed through reports, emails, oral communication etc. Here are the
few skills we need to acquire to critically evaluate these statements.
1. Identify the key words as they highlight author‘s opinion and logic and may indicate
contrast, illustration, continuation and sequence.
2. Understand the proposition, statement, argument.
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3. Identify the evidence in the form of data, statistics, surveys, facts. Understand and solve if
needed.
4. Arrive at the gist of the statement or identify the conclusion as to what the statement
finally wants to convey.
5. Most of the times, the evidence and conclusions are visible. Conclusions are based on the
evidences. In business we need to understand what are not visible. These are assumptions
and inferences.
6. Dig deeper to understand the right assumptions. Try to fathom what could strengthen or
weaken the conclusion. Some time the assumptions could be flawed. If the assumptions
are correct, then the conclusions are right.
7. Sometimes there could be a paradox between the assumption and the conclusion. Find the
explanation for the paradox.
8. When there is a flaw, determine the conclusion, evidence and central assumption. Then
predict an answer taking the error in author‘s assumption.
9. In explanatory type of arguments with paradox, identify the paradox and predict an
answer that addresses the paradox but do not contradict the evidence at hand.
10. In inference statements, complete the train of thought.
11. To weaken ―X Y‖, think either ―Z Y‖ or ―Y X‖
12. When an argument is based on the findings of a study, equipment, or analogy, compare
the evidence with that of conclusion.
13. In case of statement about the future identify assumptions about the feasibility, usefulness
and relevance of the future conditions.
Following are few examples:
Question 1
The purpose of the proposed law requiring a doctor‘s prescription for obtaining hypodermic
needles is to lower the incidence of drug-related deaths, both accidental and intentional,
involving hypodermic needles. But even knitting needles can be lethal if they fall into the
wrong hands; yet everyone would agree that imposing legal restrictions on obtaining knitting
needles would be preposterous. Hence the proposed law involving hypodermic makes no
sense and should not be enacted.
Which of the following, it true, would provide most support for the argument above?
(A) Knitting needles have been known to cause injury and death.
(B) The benefits of hypodermic needles outweigh those of knitting needles.
© The proposed law would not deter the sort of activity known to result in drug-related
deaths.
(D) The proposed law could not be effectively enforced.
(E) Knitting needles are not readily available to anybody who wants to obtain them.
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Analysis
The correct response is (A). The argument is essentially that the proposed law makes no sense
because knitting needles are dangerous as well. The argument relies explicitly on an analogy
between hypodermic and knitting needles. Thus, the two must be similar in all respects
relevant to the argument. Otherwise, the argument is unconvincing.
(A) Affirms that knitting needles are in fact dangerous, thereby affirming the analogy between
the two types of needles.
(B), (C) and (D) each in its own way supports the bare assertion that the proposed law might
not be effective. However, none of these answer choices affirms the argument‘s essential
reasoning.
(E) Actually weakens the argument, by providing a reason why hypodermic needles and
knitting needles are not relevantly similar.
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Question 2
Six weekends each year, Alpha Show grounds are used exclusively for public horse shows.
During all other weekends, the grounds are used exclusively as a public market. For its
revenues, Alpha depends entirely on admission fees, and revenue from a typical weekend
horse show is far greater than from a typical weekend market. However, Alpha‘s annual
revenues from the market far exceed its annual revenues from horse shows.
Which of the following strategies, if implemented, would likely provide the greatest boost to
Alpha‘s revenues?
(A) Increase the fee for admission to the public market, but leave the admission fees for
horse shows unchanged.
(B) Increase the fees for admission to the horse shows, but leave the admission fee for the
public market unchanged.
© Discontinue use of the grounds for horse shows, and schedules the public market for
each and every weekend of the year.
(D) Schedule some horse shows for weekdays instead of weekends; and during those
weekends, use the grounds as a public market instead.
(E) Schedule some weekend markets for weekdays instead of weekends; and during those
weekends, use the grounds for horse shows instead.
Analysis
The correct response is (E). A typical weekend horse show generates more revenue than a
typical weekend market. Hence, increasing the number of weekend horse shows is the surest
way, among the five choices, for Alpha to maximize revenue, especially if the number of days
per year that the grounds are used as a market would at least remain the same—as (E)
suggests.
(A) And (B) are incorrect choices for essentially the same reason. By increasing an admission
fee, Alpha might either enhance or reduce its total revenues, depending on the decrease in
attendance (if any) due to the fee increase. Besides, neither plan (A or B) would add to the
number of days during which one nor the other type of event takes place. Hence, neither plan
(A or B) is as likely to succeed as the one that (E) suggests.
© is the worst of the five choices, and the easiest one to eliminate; replacing an event with
one that generates significantly less revenue can only serve to reduce revenues.
(D) Suggests a course of action that is unlikely to be as effective as the one that (E) suggests.
Increasing the number of weekend markets might boost revenues. However, since a weekend
market generates less revenue than a weekend horse show, the boost would be less than if the
number of weekend horse shows were increased instead—which is what (E) suggests.
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Question 3
During the past week, 120 RamTech Corporation employees have reported symptoms of a
strain of food poisoning known as disporella, but only eight of these employees have tested
positive for the strain. A RamTech spokesperson claims that the apparent outbreak of
disporella can be attributed to contaminated food served two weeks ago at the company‘s
annual employee picnic.
Which of the following, if true, would most support the claim made by the RamTech
spokesperson above?
(A) Disporella symptoms generally last only a few days.
(B) RamTech‘s cafeteria facilities provide lunch to Ram-Tech employees during every
workday.
© People with disporella do not generally test positive for disporella until at least one
week after disporella symptoms begin to occur.
(D) People with disporella often do not exhibit disporella symptoms until more than a week
after contracting disporella.
(E) A person can test positive for disporella without exhibiting symptoms of disporella.
Analysis
The correct response is (D). The argument relies on the unstated assumption that no other
event since the picnic could have caused the outbreak instead. Statement (D) provides some
evidence that the employees who have reported disporella symptoms in fact contracted
disporella at least one week ago. Accordingly, (D) helps support the claim that it was the food
served at the picnic two weeks ago that caused the outbreak. Admittedly, (D) would provide
even stronger support if it indicated that symptoms never appear until one week after
contamination. Nevertheless, (D) is the best of the five answer choices.
(A) Has no effect on the argument. It is the time after contamination that symptoms begin to
occur, not the duration of those symptoms, that is key to identifying the source of
contamination.
(B) Actually weakens the claim, by providing another possible explanation for the outbreak.
Specifically, (B) provides for the possibility that the outbreak can be attributed to food
served in the company‘s cafeteria rather than at the picnic.
© provides some support for the argument, insofar as it helps to explain why only a few of
those reporting symptoms have tested positive so far. However, the spokesperson‘s
claim is not just that the 120 employees have disporella but that it was the picnic food
that caused the outbreak. © helps show that the 120 employees have disporella, but does
not help explain how they contracted disporella. For this reason (D) is a better choice
than ©.
(E) has no effect on the argument, at least as (E) stands. Additional statistical information
would be required to assess whether (E) supports the argument. For example, assume
for the moment that several thousand employees—including the 120 later reporting
disporella symptoms—attended the picnic. In this event (E) would strengthen the
spokesperson‘s claim, by providing an explanation for how the picnic food could have
been contaminated if only a small percentage of attendees have reported disporella
symptoms. Or assume on the other hand that the only employees attending the picnic
were the 120 later reporting disporella symptoms. In this event (E) would have no effect
on the argument. Thus, without any additional data it is impossible to assess the effect
of (E) on the argument.
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Question 4
In 1998, more citizens from the country of Monrovia migrated from Monrovia to neighboring
Abstania than during any prior year. In 1998, the number of reported violent crimes in
Abstania increased dramatically over 1997. The unavoidable conclusion is that Monrovians
who migrated from Monrovia to Abstania were responsible for this increase.
Which of the following statements, if true, would most seriously weaken the claim that
Monrovians were responsible for the increase in violent crime in Abstania during 1998?
(A) Each year more violent criminals are apprehended in Abstania than in Monrovia.
(B) During 1998 more violent crimes were reported in Abstania than in Monrovia.
© In 1998 no Monrovians migrated from either Monrovia or Abstania to any country other
than Monrovia or Abstania.
(D) In 1998 the number of unreported violent crimes in Abstania increased as well.
(E) In 1998 fewer Monrovians migrated from Monrovia to Abstania than from Abstania to
Monrovia.
Analysis
The correct response is (E). The argument relies on the unstated assumption that Abstania‘s
Monrovian population either remained stable or increased during 1998. However, (E)
provides that this population actually declined in 1998, despite the influx of Monrovians.
Given that the number of Monrovians residing in Abstania decreased while the crime rate
increased, (E) reduces the likelihood that it was Monrovians who were responsible for the
increase in violent crime in 1998.
(A) Would appear to weaken the argument, by providing ostensible evidence that
Abstanians are more likely than Monrovians to commit violent crimes. However, (A)
does not account for the possibility that in Monrovia far more violent criminals go
unapprehended than in Abstania. In fact, the argument‘s explicit reference to ―reported‖
violent crimes underscores this possibility, which prohibits us from drawing any firm
conclusion as to which group is more likely responsible for violent crimes.
(B) Provides no information useful in evaluating the argument. Whether (B) strengthens the
argument depends on addition considerations as well, such as: the total population of
Monrovia compared to Abstania; whether the Monrovian population increased or
decreased in each country during the year; and whether the crime rate in Monrovia
increased or decreased during 1998.
© Actually strengthens the argument. By providing evidence that number of Monrovians
residing in Abstania increased in 1998, (B) makes it more likely that Monrovians were
responsible for the increase in violent crime that year.
(D) Actually strengthens the argument, by affirming the essential premise that the number
of violent crimes in Monrovia increased dramatically during 1998.
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Question 5 During each of the past five years, the total demand for paper on the part of manufacturers
who produce paper packaging for consumer products has declined. During the same time
period, the cubic volume of freshly cut timber that is used to produce paper packaging has
also declined. However, reliable reports from recycling facilities across the country indicate
that the amount of paper-based packaging material that they provide to paper-packaging
companies for reuse has been increasing steadily.
The information provided best supports which of the following conclusions with respect to
the last five years?
(A) The amount of packaging using paper from freshly cut trees has decreased.
(B) The amount of paper-based packaging that has been recycled for the same uses has
exceeded the amount that has not.
© Recycled paper-based packaging has been used only for new packaging.
(D) The total amount of packaging material made of non-paper materials has increased.
(E) Consumers have increased the portion of paper products that they recycle after using.
Analysis
The correct answer is (A). According to the passage, the total paper demand for packaging has
been decreasing, while the amount of paper packaging recycled for the same purpose has been
increasing. These two facts, considered together, lend strong support to the conclusion that
manufacturers have substituting recycled paper-packaging for ―fresh‖ paper to meet their
demand for paper packaging.
(B) is not strongly inferable from the passage, which provides information only about
changes in numbers from one year to the next, not total numbers. Without any numbers,
it is impossible to compare the total amount of recycled packaging to the total amount
of ―fresh‖ packaging.
© is incorrect because the passage provides no information permitting the sweeping
inference that the all recycled paper packaging has been used to meet the paper-
packaging demands of manufacturers. For example, it‘s entirely possible (even
probable) that some used paper packaging has been recycled as office paper or
bathroom tissue.
(D) is not strongly inferable. The only information in the passage about the demand for
packaging material involves paper packaging. It is impossible to draw any strong
conclusions about the demand for non-paper packaging material.
(E) is not strongly inferable. Just because the amount of recycled paper packaging has
increased, it is unfair to conclude that the amount of paper from products has also
increased.
Question 6
As any economist knows, healthy people pose less of an economic burden to society than
unhealthy people. Not surprisingly, then, every dollar our state government spends on
prenatal care for undocumented immigrants will save taxpayers of this state three dollars.
Which of the following, if true, would best explain why the statistics cited above are not
surprising?
(A) The state‘s taxpayers pay for prenatal care of all immigrants.
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(B) Pregnant women who do not receive prenatal care are more likely to experience health
problems than other pregnant women.
© State benefits for prenatal care serve to promote undocumented immigration.
(D) Babies whose mothers did not receive prenatal care are just as healthy as other babies.
(E) Babies born in this state to undocumented immigrant parents are entitled to infant care
benefits from the state.
Analysis
The correct response is (B). The argument relies on the unstated assumption that prenatal care
results in better health and therefore less cost to society. (B) helps affirm this assumption.
(A) is irrelevant to the argument, which makes no distinction between undocumented
immigrants and other immigrants.
© Actually renders the statistics more surprising, by providing evidence that prenatal care
will add to society‘s economic burden.
(D) Also renders the statistics more surprising, by providing evidence that the cost of the
prenatal care program will not be offset by a particular health benefit—a benefit which
would lessen the taxpayers‘ economic burden.
(E) Describes benefits that might decrease the overall tax burden, but only if the prenatal
care program serves to reduce the amount of infant-care benefits paid. The argument
does not inform us whether this is the case. Thus it is impossible to assess the extent to
which (E) would explain how the prenatal care would save the taxpayers‘ money.
Question 7
Beautiful beaches attract people, no doubt about it. Just look at this city‘s beautiful beaches,
which are among the most overcrowded beaches in the state.
Which of the following exhibits a pattern of reasoning most similar to the one exhibited in the
argument above?
(A) Moose and bear usually appear at the same drinking hole at the same time of day.
Therefore, moose and bear must grow thirsty at about the same time.
(B) Children who are scolded severely tend to misbehave more often than other children.
Hence if a child is not scolded severely that child is less likely to misbehave.
© This computer program helps increase the work efficiency of its users. As a result, these
users have more free time for other activities.
(D) During warm weather my dog suffers from fleas more so than during cooler weather.
Therefore, fleas must thrive in a warm environment.
(E) Pesticides are known to cause anemia in some people. However, most anemic people
live in regions where pesticides are not commonly used.
Analysis
The correct response is (D). The original argument bases a conclusion that one phenomenon
causes another on an observed correlation between the two phenomena. The argument boils
down to the following:
Premise: X (beautiful beach) is correlated with Y (crowd of people).
Conclusion: X (beautiful beach) causes Y (crowd of people).
Answer choice (D) demonstrates the same pattern of reasoning:
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Premise: X (warm weather) is correlated with Y (fleas).
Conclusion: X (warm weather) causes Y (fleas).
(A) Demonstrates a different pattern of reasoning than the original argument:
Premise: X (moose at the drinking hole) is correlated with Y (bears at the drinking hole).
Conclusion: X (moose) and Y (bear) are both caused by Z (thirst).
(B) demonstrates a different pattern of reasoning than the original argument:
Premise: X (scolding children) is correlated with Y (misbehavior among children).
Assumption: Either X causes Y, or Y causes X.
Conclusion: Not X (no scolding) will be correlated with not Y (no misbehavior).
© demonstrates a different pattern of reasoning than the original argument:
Premise: X (computer program) causes Y (efficiency).
Assumption: Y (efficiency) causes Z (free time).
Conclusion: X (computer program) causes Z (free time).
(E) demonstrates a different pattern of reasoning than the original argument. In fact, (E) is
not a complete argument; it contains two premises but no conclusion:
Premise: X (pesticides) causes Y (anemia).
Premise: Not X (pesticide-free regions) is correlated with Y (anemia).
Question 8
For several consecutive years, poultry prices at each of three statewide grocery-store chains
have exceeded the national average by about fifty percent. Also, the per-pound difference in
poultry prices among the three stores never amounted to more than a few pennies, while
among grocery stores in other states, the prices varied by nearly a dollar over the same period.
The three chains must have conspired to not compete amongst themselves and to fix their
poultry prices at mutually agreed-upon levels.
The claim that the three grocery-store chains conspired to fix poultry prices rests on which of
the following assumptions for the time period referred to above?
(A) No other grocery store charged higher prices for poultry than the three chains.
(B) Average poultry prices in the state where the three chains operate exceeded the national
average.
© The price that grocery stores paid for poultry did not vary significantly from state to
state.
(D) Consumers in the state where the three chains operate generally prefer poultry over
other meats even if poultry is more expensive than other meats.
(E) Other grocery stores operating in the same state as the three chains also sell poultry to
consumers.
Analysis
The correct answer is ©. The argument relies on the assumption that all other possible factors
in the price grocery stores charge for poultry were essentially the same in the state where the
three chains operate as in other states. One such factor is wholesale price (the price grocery
stores pay suppliers for poultry). A higher wholesale price generally leads to higher prices for
consumers. Answer choice © expressly eliminates this factor. Admittedly, an ―ideal‖ answer
choice would provide a more sweeping statement—that all factors possibly affecting poultry
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price were the same from state to state. Nevertheless, © is the only answer choice that serves
to affirm the assumption; thus © is the best choice.
(A) admittedly provides some support for the argument. Higher poultry prices at another
store would weaken the argument that the three chains conspired to fix prices; thus
given the inverse—that no other store charges higher poultry prices—the argument‘s
conclusion becomes more probable. However, (A) is not a necessary assumption. Even
if a certain grocery store charged higher prices for poultry during the period, this fact
would probably not be statistically significant in light of the much lower national
average—especially if that store were located in another state and therefore did not
compete with the three chains.
(B) actually serves to weaken the argument. Given (B), the greater the number of other
grocery stores in the same state the more likely that these other stores also charged high
prices for poultry. This fact would in turn help refute the claim that the three chains
were motivated by any concern other than to compete effectively against other stores in
the state.
(D) is not relevant to the argument, which is concerned with poultry prices charged by the
three chains compared to poultry prices in other states, not compared to prices of other
meats.
(E) actually serves to weaken the argument. The more competitors, the less likely these
three chains together hold a statewide poultry monopoly. (Monopolists are more likely
to charge whatever price they wish for their products.)
Question 9
Newspaper publishers earn their profits primarily from advertising revenue, and potential
advertisers are more likely to advertise in newspapers with a wide circulation—a large
number of subscribers and other readers—than with other newspapers. But the circulation of
the newspaper that is currently the most profitable one in this city has steadily declined during
the last two years, while the circulation of one of its competitors has steadily increased.
Any of the following, if true, would help explain the apparent discrepancy between the two
statements above EXCEPT:
(A) Advertisers generally switch from the most widely circulated newspaper to another one
only when the other one becomes the most widely circulated newspaper instead.
(B) Advertising rates charged by the most profitable newspaper in the city are significantly
higher than those charged by its competitors.
© The most profitable newspaper in the city receives revenue from its subscribers as well
from advertisers.
(D) The circulation of the most profitable newspaper in the city is still greater than of any of
its competitors.
(E) The number of newspapers competing viably with the most profitable newspaper in the
city has increased during the last two years.
Analysis
The correct response is ©. The correct response is (E). Assuming the number of viable
competitors has increased during the last two years, the likely result would be to draw
circulation away from already viable newspapers, including the most profitable one. Given
that profitability depends primarily on advertising revenues and therefore on circulation, (E)
actually exacerbates the discrepancy between the two statements.
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(A) and (D) help explain why the most profitable newspaper remains most profitable even
though its circulation is declining: Advertisers have not yet begun to switch because the
most profitable newspaper is still the most widely circulated.
(B) Helps explain the discrepancy. Although the argument provides that advertisers are
more likely to advertise with widely circulated newspapers than with others, it is
entirely possible that other factors, such as advertising rates that a newspaper charges,
also affect which newspapers advertisers choose.
© Helps explain the discrepancy, by identifying another source of revenue and therefore
another means of enhancing profitability. Simply stated, the more sources of revenue
the more profitable a newspaper is likely to be. This in turn helps explain why the most
profitable newspaper in the city remains the most profitable one, despite declining
circulation. Admittedly, as circulation decreases so does subscriber revenue, and thus
overall profitability. Yet the newspaper‘s profitability is still greater than it would be
without revenue from its subscribers.
Question 10
People should be held accountable for their own behavior, and if holding people accountable
for their own behavior entails capital punishment, then so be it. However, no person should be
held accountable for behavior over which he or she had no control.
Which of the following is the most logical conclusion of the argument above?
(A) People should not be held accountable for the behavior of other people.
(B) People have control over their own behavior.
© People cannot control the behavior of other people.
(D) Behavior that cannot be controlled should not be punished.
(E) People have control over behavior that is subject to capital punishment.
Analysis
The correct response is (B). The argument includes the following two premises:
Premise: People are accountable for their own behavior.
Premise: People are not accountable for behavior they cannot control.
Here‘s the logical conclusion based on these two premises:
Conclusion: People can control their own behavior.
(A) would require that people never have control over the behavior of other people. Yet the
argument does not provide this premise.
© would require that people should not be held accountable for the behavior of other
people. Yet the argument does not provide this premise.
(D) is not a conclusion; (D) simply reiterates one of the argument‘s premises (the second
sentence).
(E) is not inferable. The argument allows for the possibility that a person might not have
control over another person‘s behavior which is subject to capital punishment.
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Reading comprehension
In business apprehending the information given in the form of passages, reports in various
forms is very important to understand and communicate with the author effectively.
In such situations, adopt the following:
1. Identify the topic on which the passage or report is written.
2. Understand the scope of the topic covered.
3. Summarize the purpose of the passage.
4. Channel your thoughts to understand the evidence, assumptions of the author and the
conclusions drawn.
5. Read strategically. Map the passage.
6. Determine the structure of the passage.
Questions 1-3 are based on the following passage:
In nearly all human populations a majority of individuals can taste the artificially synthesized
chemical phenylthiocarbamide (PTC). However, the percentage varies dramatically—from as
low as 60 percent in India to as high as 95 percent in Africa. That this polymorphism is
observed in non-human primates as well indicates a long evolutionary history which, although
obviously not acting on PTC, might reflect evolutionary selection for taste discrimination of
other, more significant bitter substances, such as certain toxic plants.
A somewhat more puzzling human polymorphism is the genetic variability in earwax, or cerumen,
which is observed in two varieties. Among European populations 90 percent of individuals have a
sticky yellow variety rather than a dry, gray one, whereas in northern China these numbers are
approximately the reverse. Perhaps like PTC variability, cerumen variability is an incidental
expression of something more adaptively significant. Indeed, the observed relationship between
cerumen and odorous bodily secretions, to which non-human primates and, to a lesser extent humans,
pay attention suggests that during the course of human evolution genes affecting body secretions,
including cerumen, came under selective influence.
Question 1
It can be inferred from the passage that human populations vary considerably in their
(A) Sensitivity to certain bodily odors
(B) Capacity for hearing
© Ability to assimilate artificial chemicals
(D) Vulnerability to certain toxins found in plants
(E) Ability to discern bitterness in taste
Analysis
The correct response is (E). In the passage‘s first paragraph the author points out that the
ability to taste PTC varies among human populations, then in the final sentence of that
paragraph refers to ―other, more significant bitter substances....‖ It can reasonably be inferred
from these two statements, considered together, that PTC is a bitter substance.
(A) is unsupported in the passage; in the second paragraph the author points out a
correlation between earwax and odorous secretions, but neither states nor suggests that
either has any affect on the sense of smell.
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(B) is unsupported in the passage; in the second paragraph the author indicates that human
populations vary in earwax type, but neither states nor implies that earwax type has any
effect on hearing.
© Grossly distorts the first sentence of the passage, which refers to the ability to taste one
particular artificial chemical.
(D) finds some support in the passage, but this support is very weak. (D) relies on the
unsubstantiated inference that since human populations varies considerably in their
ability to taste bitterness; they must also vary considerably in their vulnerability to
certain toxins in bitter-tasting plants. Moreover, without explicit support in the passage
(D) is ambiguous in the use of ―vulnerability,‖ which might refer just to the body‘s
vulnerability to toxins once they are ingested, or also to one‘s vulnerability to ingest a
toxic plant—for lack of tasting the bitterness that warns of the plant‘s toxicity.
Question 2
Which of the following provides the most reasonable explanation for the assertion in the first
paragraph that evolutionary history ―obviously‖ did not act on PTC?
(A) PTC is not a naturally occurring chemical but rather has been produced only recently
by scientists.
(B) Most humans lack sufficient taste sensitivity to discriminate between PTC and bitter
chemicals occurring naturally.
© Variability among humans respecting PTC discrimination, like variability respecting
earwax, cannot be explained in terms of evolutionary adaptivity.
(D) The sense of taste in humans is not as discriminating as that in non-human primates.
(E) Unlike non-human primates, humans can discriminate intellectually between toxic and
non-toxic bitter substances.
Analysis
The correct response is (A). In the first sentence the author points out that PTC is an
artificially synthesized chemical; thus, PTC has clearly not existed long enough to play
any part whatsoever in the evolution of taste discrimination among primates.
(B) is entirely unsupported by the passage, which provides no information comparing
human sensitivity to the bitter taste of PTC with that of other bitter chemicals. In any
case, as a response to the question (B) makes little sense.
© runs contrary to the passage, which in fact offers an evolutionary explanation for human
variability with respect to both PTC discrimination and earwax type. In any case, as a
response to the question © is nonsensical.
(D) provides an assertion that, although probably factual, finds no direct support in the
passage. is consistent with common knowledge, but it does not respond to the question.
Moreover, in the context of the portion of the passage that the question cites, (D) makes
little sense as an explanation.
(E) provides a vague assertion about the role of ―intellect‖ in discerning between toxic and
non-toxic substances. Whether or not this assertion accords with fact, it is unsupported
in the passage.
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Question 3
Which of the following best expresses the main idea of the passage?
(A) Artificially synthesized chemicals might eventually serve to alter the course of
evolution by desensitizing humans to certain tastes and odors.
(B) Some human polymorphisms might be explained as vestigial evidence of evolutionary
adaptations that still serve vital purposes in other primates.
© Sensitivity to taste and to odors have been subject to far greater natural selectivity
during the evolution of primates than previously thought.
(D) Polymorphism among human populations varies considerably from region to region
throughout the world.
(E) The human senses of taste and smell have evolved considerably over the course of
evolutionary history.
Analysis
The correct response is (B). In the first paragraph the author‘s main concern is to point out
that the variability among human populations regarding sensitivity to PTC might be a trace of
the evolutionary process of natural selectivity. Then, in the second paragraph the author offers
a similar suggestion about variability in earwax type. To support these assertions the author
infers that both characteristics still serve useful purposes among non-primates—from whom
humans presumably evolved. This inference is especially clear with respect to identifying
bitter substances that might be toxic. (B) Accurately reflects the author‘s main assertion and
supporting evidence.
(A) is entirely off the topic. Nowhere in the passage does the author discuss the future
course of human evolution, let alone whether artificially synthesized chemicals will
alter that course.
© finds some support in the passage, insofar as the author argues that certain human
polymorphisms involving taste and, indirectly, bodily odors are the result of the
evolutionary process of natural selection. However, the author makes no claim that the
impact of natural selection on the human senses is greater than previously thought.
(D) Is a poor response in two respects. First, (D) distorts the meaning of ―polymorphism.‖ It
is the extent of certain polymorphic disparities, not certain polymorphisms themselves,
that varies from region to region. Second, (D) is too narrow in that it overlooks the
author‘s ultimate concern with explaining those polymorphisms.
(E) Finds some support in the passage, and (E) accords with everyday knowledge.
However, (E) is far too broad and vague; it overlooks the author‘s specific objective—
to provide a common explanation for two particular human polymorphisms.
Questions 4-6 are based on the following passage:
The poetic expressiveness and creativity of Japanese women poets of the Manyoshu era is
generally regarded as a manifestation of the freedom and relatively high political and
economic status women of that era enjoyed. During the Heian period (A.D. 794-1185) which
followed, Japanese women became increasingly relegated to domestic roles under the
influence of Buddhism and Confucianism, which excluded women from the political and
economic arenas. Yet, since poetry of the period came to be defined solely as short lyrical
poetry, known as waka, and became the prevailing means of expressing love, women
continued to excel in and play a central role in the development of classical Japanese poetry.
Moreover, while official Japanese documents were written in Chinese, the phonetic alphabet
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kana was used for poetry. Also referred to as onna moji (―women‘s letters‖), kana was not
deemed sufficiently sophisticated for use by Japanese men, who continued to write Chinese
poetry, increasingly for expressing religious ideas and as an intellectual pastime. Chinese
poetry ultimately yielded, then, to waka as the mainstream of Japanese poetry.
Question 4
Based on the passage, mainstream Japanese poetry of the Heian period can best be described
as
(A) Philosophical in its concern
(B) More refined than the poetry of the Manyoshu era
© An outgrowth of Buddhism and Confucianism
(D) Sentimental in nature and lyrical in style
(E) Written primarily for a female audience
Analysis
The correct response is (D). The passage indicates that during the Heian period poetry came
to be defined as ―lyrical‖ and became the ―prevailing means of expressing love‖—that is, for
expressing personal sentiment. The passage then indicates, in the final sentence, that this type
of poetry (waka) became the mainstream Japanese poetry of that period.
(A) Confuses waka with poetry of the period written by Japanese men, which poetry was
typically concerned with religious and intellectual ideas.
(B) is unsupported in the passage, which neither states nor implies that Japanese poetry of
one period was more refined than that of the other period.
© is unsupported in the passage, which makes no attempt to trace the influence of
Buddhism and Confucianism on the development of mainstream Japanese poetry during
the Heian period.
(E) Finds no explicit support in the passage, which indicates that waka (mainstream
Japanese poetry of the Heian period) was written by women, but not that it was written
primarily for women.
Question 5
Which of the following statements about kana finds the LEAST support in the passage?
(A) It was based on the sound of the Japanese language.
(B) It was used primarily by Japanese women.
© It was used for Japanese poetry but not for Japanese prose.
(D) It was used in Japan after A.D. 793.
(E) It was considered inappropriate for austere subject matter.
Analysis
The correct response is ©. The passage neither states nor implies that kana was used
exclusively for poetry—and not for prose.
(A) Finds explicit support in the passage, which indicates that kana is a ―phonetic‖ (based
on pronunciation) alphabet.
(B) Finds explicit support in the passage, which refers to kana as ―women‘s letters,‖ and
which indicates that Japanese men continued to use the Chinese alphabet rather than
kana.
(D) Finds explicit support in the passage, which makes clear that the use of kana in Japanese
waka poetry occurred during the Heian period, which began in A.D. 794.
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(E) is strongly inferable from the passage information. According to the passage, Japanese
men did not use kana because they did not consider it ―sufficiently sophisticated.‖ The
passage then indicates that poetry written by Japanese men dealt primarily with
religious and intellectual topics—topics which are reasonably regarded as austere
(difficult to comprehend) compared to the simpler, sentimental concerns expressed in
waka poetry (written in kana).
Question 6
The author‘s primary purpose in the passage is to
(A) Refute a commonly accepted explanation for the role of women in the development of
Japanese poetry
(B) Identify the reasons for the popularity of a distinct form of literary expression in Japan
© distinguish between the Japanese poetry of one historical period with that of another
(D) Trace the influence of religion on the development of Japanese poetry
(E) Provide an explanation for the role of women in the development of Japanese poetry
Analysis
The correct response is (E). Of the five answer choices, (E) best reflects the thrust of the
passage as a whole, which is as follows: The reason why women played a large role in
Japanese poetry prior to the Heian period fails to account for the significant role of women in
Japanese poetry during that period. The significance of that role is explained by the use of a
phonetic alphabet, which only women used for the type of poetry that ended up appealing to
the Japanese mainstream more so than other types.
(A) is unsupported by the passage, which makes no explicit attempt to refute or oppose any
particular explanation for the role of women in the development of Japanese poetry
during either the Manyosho era or the Heian period.
(B) is off the focus of the passage, in which no attempt is made to explain why waka poetry
appealed to the mainstream during the Heian or any other time period.
© distorts the passage‘s focus. Presumably, the two historical periods to which © refers
are the Manyosho era and the Heian period. But the passage contains no information
about the poetry of the former period, nor does the passage provide any comparison
between poetry of the two periods.
(D) is unsupported by the passage. The passage does suggest that the tenets of Buddhism
and Confucianism influenced the societal roles of Japanese women during the Heian
period. But the passage provides no explanation as to how those roles account for the
type of poetry that emerged during that period.
Questions 7-10 are based on the following passage:
In the past century Irish painting has changed from a British-influenced lyrical tradition to an
art that evokes the ruggedness and roots of an Irish Celtic past. At the turn of the twentieth
century Irish painters, including notables Walter Frederick Osborne and Sir William Orpen,
looked elsewhere for influence. Osborne‘s exposure to ―plein air‖ painting deeply impacted
his stylistic development; and Orpen allied himself with a group of English artists, while at
the same time participated in the French avant-garde experiment, both as painter and teacher.
However, nationalist energies were beginning to coalesce, reviving interest in Irish culture—
including Irish visual arts. Beatrice Elvery‘s Éire (1907), a landmark achievement, merged the
devotional simplicity of fifteenth-century Italian painting with the iconography of Ireland‘s
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Celtic past, linking the history of Irish Catholicism with the still-nascent Irish republic. And,
although also captivated by the French plein air school, Sir John Lavery invoked the
mythology of his native land for a 1928 commission to paint the central figure for the bank
note of the new Irish Free State. Lavery chose as this figure Éire, with her arm on a Celtic
harp, the national symbol of independent Ireland.
In Irish painting from about 1910, memories of Edwardian romanticism coexisted with a new
sense of realism, exemplified by the paintings of Paul Henry and Seán Keating, a student of
Orpen‘s. Realism also crept into the work of Edwardians Lavery and Orpen, both of whom
made paintings depicting World War I, Lavery with a distanced Victorian nobility, Orpen
closer to the front, revealing a more sinister and realistic vision. Meanwhile, counterpoint to
the Edwardians and realists came Jack B. Yeats, whose travels throughout the rugged and
more authentically Irish West led him to depict subjects ranging from street scenes in Dublin
to boxing matches and funerals. Fusing close observations of Irish life and icons with an Irish
identity in a new way, Yeats changed the face of Irish painting and became the most
important Irish artist of his century.
Question 7
With respect to which of the following painters does the passage provide LEAST support for
the assertion that the painter was influenced by the contemporary art of France?
(A) Walter Frederick Osborne
(B) Sir William Orpen
© Beatrice Elvery
(D) Seán Keating
(E) Sir John Lavery
Analysis
The correct response is ©. The passage indicates that Elvery was influenced by fifteenth-
century Italian art, but neither states nor suggests that she was influenced by her French
contemporaries.
(A) finds explicit support in the first paragraph, which indicates that Osborne‘s exposure to
plen aire painting impacted his style. (The second paragraph makes clear that plen aire
was a French school.)
(B) finds explicit support in the first paragraph, which indicates that Orpen participated in
France‘s avant-garde experiment.
(D) is not explicitly supported in the passage. However, in the third paragraph the author
indicates that Keating was a student of Orpen. The fact that Orpen participated in the
French avant-garde experiment as a teacher lends strong support to the assertion that
Keating was also influenced by the avant-garde movement.
(E) finds explicit support in the second paragraph, which indicates that Lavery was
captivated by the French plen aire school.
Question 8
Which of the following best explains the author‘s use of the word ―counterpoint‖ in referring
to Yeats?
(A) Yeats‘ paintings differed significantly in subject matter from those of his
contemporaries in Ireland.
(B) Yeats reacted to the realism of his contemporary artists by invoking nineteenth-century
naturalism in his own painting style.
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© Yeats avoided religious and mythological themes in favor of mundane portrayals of
Irish life.
(D) Yeats‘ paintings suggested that his political views departed radically from those of the
Edwardians and the realists.
(E) Yeats built upon the realism painting tradition, elevating it to unprecedented artistic
heights.
Analysis
The correct response is (A). Although the passage does not indicate the subject matter of the
paintings of realists Henry and Keating, the author discusses Lavery and Orpen as depicting
in their paintings somewhat romanticized scenes of politically charged subject matter. Yeats‘
focus on everyday Irish life is set against, yet complements, (i.e., provides a ―counterpoint
to‖) the cynosures of Lavery and Orpen.
(B) is unsupported in the passage, which provides no information about Yeats‘ painting
style, only about his background and the subject matter of his paintings.
© is in all likelihood true, based upon the passage, but wrongly implies that the paintings
of the realists and Edwardians primarily involved religious and mythological themes.
Although in the second paragraph the author does suggest that Lavery incorporated
Celtic mythology into his work, the passage provides no such suggestions regarding
Orpen, Henry, or Keating. Nor does the passage suggest that either Lavery, Orpen,
Henry, or Keating incorporated religious themes into his paintings.
(D) is unsupported in the passage, which provides no information about the political views
of Lavery, Orpen, Henry, Keating, or Yeats—let alone any comparison between the
political views of these painters.
(E) finds support in the passage only insofar as Yeats‘ preeminence among Irish artists does
suggest that he achieved great artistic heights. However, in stating that Yeats provided
counterpoint to the Edwardians and the realists the author strongly suggests that Yeats
was not a realist. In any event, (E) does not explain the use of the term ―counterpoint,‖
which suggests a complementary contrariness or opposition—perhaps in style or subject
matter.
Question 9
The author points out the coexistence of romanticism and realism most probably in order to
show that
(A) Irish painters of the early twentieth century often combined elements of realism with
those of romanticism into a single painting
(B) Irish painters of the early twentieth century tended to romanticize the harsh reality of
war
© For a time painters from each school influenced painters from the other school
(D) Yeats was influenced by both the romantic and realist schools of Irish painting
(E) The transition in Irish painting from one predominant style to the other was not an
abrupt one
Analysis
The correct response is (E). The passage‘s main concern, expressed in the passage‘s first
sentence, is with the transition in Ireland from art that was influenced primarily by Britain‘s
lyrical tradition to art that reflected Ireland‘s distinct national character. Of the five answer
choices, (E) is most consistent with this overall concern.
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(A) Finds only scant support in the passage. Lavery‘s approach to the subject of war might
be characterized as combining Edwardian romanticism with realism. However, the pas
sage does not suggest that any other Irish painters combined either subject matter or
style of the two schools in the same painting.
(B) is incorrect for essentially the reason as (A). Although Lavery‘s approach to the subject
of war might be characterized as romanticizing war‘s harsh reality, the passage suggests
no general tendency among Irish painters to romanticize war.
© finds some support in the passage. The statement that realism ―crept into‖ the work of
Orpen and Lavery suggests that the realists influence the Edwardians. Conversely, since
Keating (a realist) was a student of Orpen (an Edwardian), presumably influenced
Keating. However, (E) explains the author‘s point in mentioning the coexistence of the
two schools far more effectively than © does.
(D) is a poor response in two respects. First, the assertion that Yeats was influenced by
romanticism finds no support in the passage. Secondly, (D) does not respond to the
question, which seeks to understand the author‘s purpose in pointing out the coexistence
of romanticism and realism.
Question 10
Which of the following is the most likely title of a longer article in which the passage might
have appeared?
(A) ―20th
Century Irish Masterpieces: A Coalescence of Painting Styles‖
(B) ―Who Deserves Credit for the Preeminence of Yeats among Irish Painters?‖
© ―Realism vs. Romanticism: Ireland‘s Struggle for National Identity‖
(D) ―Irish Paintings: Reflections of an Emerging Independent State‖
(E) ―The Role of Celtic Mythology in Irish Painting‖
Analysis
The correct response is (D). As a whole, the passage involves the increasing role that Irish
tradition and nationalism played in the subject matter of Irish painting, beginning at the turn
of the twentieth century. The first sentence strongly suggests that the article would continue in
this vein.
(A) Fails to embrace the passage‘s main concern with how an increasing sense of Irish
nationalism was reflected in Irish painting.
(B) Finds scant support in the passage. Although the article might go on discredit Yeats or
to otherwise identify which of Yeats‘ predecessors had the greatest influence on him,
the passage itself does not suggest that the article might proceed in this direction. In
fact, the first sentence of the passage, which appears to be a possible thesis statement for
the article, suggests a different direction.
© is far too broad in that it fails to limit its scope to the subject of painting. © is also
distorted in its focus on two particular schools (realism and romanticism), rather than on
the overall impact of the emerging Irish state on Irish painting. Moreover, the term ―vs.‖
suggests that realism and romanticism were competing against each other, yet the
passage suggests no such competition, indicating only that the two schools ―coexisted.‖
(E) is too narrow in scope, failing to embrace the overall role of Ireland‘s nascent
independence on Irish painters and paintings.
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purpose of knowledge sharing.
Business English
English language is the most preferred language for conducting the business. Most of the
communication either verbal or written is done in English language. Hence it is imperative
that we use English correctly so as to communicate effectively and efficiently.
Often the errors are in:
1. English grammar
2. Style of usage
3. Idioms
We must avoid the following errors:
1. Verbs:
a. The verb must agree with the subject of the sentence. Plural subjects take plural verbs
and singular subjects take singular verbs.
b. The verb tense must match the meaning of the sentence as a whole.
2. Pronouns:
a. Pronoun must refer unambiguously to a specific noun.
b. Pronoun must agree in number with the noun it replaces.
3. Modification:
a. Adjectives modify nouns. Adverbs modify verbs, adjectives or even other adverbs.
b. A modifying phrase must clearly refer to what it modifies. It should be placed close
as possible to what it modifies.
4. Parallel structure:
a. Items in a list must have a parallel form.
b. Many two-part constructions set up parallel elements. Examples: ―not only A but also
B‖, ―from A to B‖ and ―either A or B‖
c. Parallel structures must be consistent.
5. Comparisons:
a. Compared items must have parallel form.
b. Items being compared must be both grammatically and logically comparable.
c. Ensure that the comparisons are correct and avoid any ambiguity.
6. Usage and style:
a. Avoid unnecessary wording and redundancy.
b. Avoid passive verbs wherever possible.
c. Avoid clunky, choppy or awkward sounding sentences.
d. Use correct idioms.
7. Miscellaneous Errors:
a. Two clauses should be connected by one, and only one, connector (because, although,
as, but, etc.,)
b. The connector used should make sense with the rest of the sentence.
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Following are some of the exercises:
Question 1
Upon appearing first as a tiny speck in the night sky, some comets can eventually grow quite
large in appearance.
(A) Upon appearing
(B) Appearing
(C) The appearance of
(D) When appearing
(E) To appear
Analysis
The correct response is (B). In the original version (A), the word upon confuses the meaning
of the sentence, by suggesting nonsensically that comets grow large in appearance
immediately—as soon as they appear as a tiny speck. (B) is concise and clears up the
confusion created by upon in the original version.
(C) is nonsensical.
(D) is no better than the original version. The word when, like upon, confuses the meaning
of the sentence.
(E) is nonsensical.
Question 2
Because global warming is increasing the sea level, alternative ways to utilize waterfront land
ought to be explored.
(A) Alternative ways to utilize
(B) Alternative ways of utilization of
(C) Alternatives to using
(D) Alternatives of use of
(E) Alternative utilizations for
Analysis
The correct response is (A). The original version (A) is grammatically correct and is the best
version.
(B) is wordy and awkward.
(C) Alters the meaning of the original version by suggesting not using waterfront land at all.
(D) is nonsensical.
(E) Contains utilizations, which is not a word.
Question 3
Job applicants for computer programming jobs are at times asked to demonstrate their
programming skills on the spot.
(A) Job applicants for computer programming jobs are at times
(B) Job applicants are sometimes for computer programming jobs
(C) For some computer programming jobs, job applicants at times are
(D) In some cases some applicants for computer programming jobs are
(E) Applicants for computer programming jobs are sometimes
Analysis
The correct response is (E). The original version (A) is redundant in its use of job twice; the
first occurrence is unnecessary. Also, at times is idiomatically improper here. Two proper
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idioms here would be sometimes and occasionally. (E) corrects both problems by omitting job
from the beginning of the sentence and by replacing at times with sometimes.
(B) and (C) each fails to correct the redundancy, and each is awkwardly constructed.
In (D), the phrase [i]n some cases is awkward. Moreover, this phrase alters the meaning of the
original version by going too far in limiting the situations in which a demonstration is
requested.
Question 4
The need to foster allegiances between all the states was recognized by Madison and
Hamilton, among others, during its burgeoning independence from England by the United
States.
(A) The need to foster allegiances between all the states was recognized by Madison and
Hamilton, among others, during its burgeoning independence from England by the
United States.
(B) The need to foster allegiances was recognized by Madison and Hamilton, among others,
between all the states during the United States‘ burgeoning independence from England.
(C) During a burgeoning independence from England by the United States, among others,
Madison and Hamilton recognized the need to foster allegiances among all the states.
(D) During the United States‘ burgeoning independence from England, Madison and
Hamilton, among others, recognized the need to foster allegiances among all the states.
(E) The need recognized by Madison and Hamilton, among others, was to foster allegiances
among all the states during the United States‘ burgeoning independence from England.
Analysis
The correct response is (D). The original version (A) is flawed in three respects. First, its use
of the passive voice (...was recognized by...) is a bit awkward. Secondly, between is
incorrectly used to refer to more than two states; among should be used instead. Thirdly, the
pronoun its (in the final clause) does not refer clearly to its intended antecedent United States.
The sentence should be reconstructed so that its follows United States. (D) revamps the
sentence, remedying all three problems with the original version.
(B) is no better than the original version. It splits the grammatical element allegiances
between, resulting in a confusing sentence. Also, between should be replaced with
among. Finally, (B) uses the passive voice awkwardly.
(C) remedies the problems with the original version, but the position of among others
confuses the meaning of the sentence—by suggesting that the states‘ independence was
from not just England but other countries as well. Also, the first clause is not as succinct
and clear as the first clause in (D).
(E) is grammatically correct, but the first portion (The need recognized by...was to foster) is
not only awkward in its passive construction but also distorts the sentence‘s meaning—
by implying that Madison and Hamilton recognized only one need.
Question 5
Contrary to popular myth, war heroes rarely earn their status by acting as if they themselves
are invincible.
(A) if they themselves are invincible
(B) though they are invincible
(C) being invincible
(D) invincible
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(E) if they were invincible
Analysis
The correct response is (E). The original version (A) intends to express a contrary-to-fact
situation, using the subjunctive mood; thus were (instead of are) is appropriate here. Also, the
reflexive pronoun themselves is improper here. (Compare the phrase consider themselves
invincible, which uses the reflexive form properly.) (E) corrects both problems with the
original version.
(B) does not use the subjunctive form.
(C) uses an improper idiom (as being).
(D) does not use the subjunctive form, and the phrase as invincible makes no sense in the
sentence‘s context (as invincible as what?).
Question 6
There is a gene that causes hemophilia, and if paired with a healthy gene the individual will
not develop the disease‘s symptoms.
(A) There is a gene that causes hemophilia, and if paired with a healthy gene the individual
will not develop
(B) If the gene that causes hemophilia is paired with a healthy gene, then the individual will
not develop
(C) If paired with a healthy gene, the gene that causes hemophilia will prevent the
individual from developing
(D) Hemophilia is caused by a gene that, if paired with a healthy gene, will not develop in
the individual
(E) The gene that causes hemophilia, if paired with a healthy gene, causes the individual not
to develop
Analysis
The correct response is (B). In the original version (A), [t]here is sets up an awkward and
unnecessarily wordy sentence. Also, the sentence‘s grammatical construction implies a
pairing of a gene with the individual, thereby distorting the sentence‘s intended meaning. The
sentence should be reconstructed to make clearer that it is the pairing of two genes that
prevents hemophilia. (B) remedies both problems with the original version without creating
any new problems.
(C) remedies both problems with the original version and contains no grammatical errors.
However, © obscures the sentence‘s intended meaning—by implying that the gene that
causes hemophilia also prevents it. © would need to be reconstructed to more clearly
convey the idea that it is the pairing of two particular types of genes that serves to
prevent hemophilia.
(D) remedies both problems with the original version. However, the last clause in (D) is
awkwardly constructed. The subject of the verb develops is individual (the individual
develops symptoms), but (D) improperly suggests that the gene develops the symptoms.
(E) contains no grammatical errors. However, the phrase causes the individual not to
develop is awkward and confusing.
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The given information is compiled from various offline / online sources, towards the sole
purpose of knowledge sharing.
Question 7
Improved sonar technology, together with less stringent quotas, account for the recent
increase in the amount of fish caught by commercial vessels.
(A) account for the recent increase in the amount of
(B) would account for a recent increase in
(C) accounts for the recent increase in the number of
(D) account for recent increases in amounts of
(E) is accounted for by the recent increase in
Analysis
The correct response is ©. The original sentence (A) contains a subject-verb agreement error.
The plural verb account does not agree in number with its singular subject technology. The
intervening clause (set off by commas) should not affect the verb‘s case, which should be
plural (accounts). (C) corrects this error. Notice that (C) changes amount to number; either
word is acceptable here since in this context fish could be considered either by number or by
weight—for example, tonnage.
Although (B) seems to correct the agreement error by using the subjunctive verb form would
account (this form could be either singular or plural), this subjunctive form alters the meaning
of the original sentence, transforming it into a hypothetical, or conditional, statement.
(D) fails to correct the subject-verb agreement error. Also, the plural amounts is misused here.
(The singular amount or number is proper here.)
Although (E) is grammatically correct, by using the passive voice without reconstructing the
sentence, (E) completely distorts the meaning of the original sentence. (E) suggests that the
increase in fish caught by commercial vessels is responsible for improved solar technology—
instead of the other way around.
Question 8
Through careful examination, competent diagnosing and successful treatment, patients grow
to trust their physicians.
(A) diagnosing and successful treatment, patients grow to trust their physicians
(B) diagnosis and treatment, if successful, lead patients to trust their physicians
(C) and successful diagnosing and treatment, physicians develop trust in their patients
(D) diagnosis and successful treatment, physicians help their patients grow to trust them
(E) diagnosis and successful treatment, physicians develop in their patients growing trust
Analysis
The correct response is (D). The original sentence (A) suffers from faulty parallelism. The
words examination, diagnosing, and treatment are not all grammatically parallel. One solution
is to replace diagnosing with diagnosis. Also, notice that the first clause seems to refer
nonsensically to patients because of this word‘s proximity to the clause. The solution is to
reconstruct the sentence so that the clause is closer to physicians than to patients. (D) corrects
both errors without creating any new ones.
(B) Creates an awkward, nonsensical sentence.
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The given information is compiled from various offline / online sources, towards the sole
purpose of knowledge sharing.
(C) fails to correct the faulty parallelism. © also alters the meaning of the original sentence;
competent and successful refer in © to both diagnosis and treatment. Also, the final
clause in © is ambiguous. Are physicians trusting their patients, or vice versa?
(E) corrects both errors in the original sentence. However, the grammatical element develop
growing trust is split; the resulting clause is unclear and awkward.
Question 9
Because oil prices are declining, demand for alternative energy products is lessening.
(A) Because oil prices are declining, demand for alternative energy products is lessening.
(B) Because of declining oil prices, alternative energy products are lower in demand.
(C) In view of the decline of oil prices, demand for alternative energy products is also
declining.
(D) Being that oil prices are lessening in amount, so too is the demand for alternative energy
products.
(E) Considering the fact that oil prices are declining, demand for alternative energy
products is lessening.
Analysis
The correct response is (A). The original version (A) is the best one.
(B) is nonsensical; lower appears to refer to energy products rather than to demand.
(C) The phrase in view of is inappropriate to express the meaning of the original version.
Also, the idiom decline in is preferred over decline of.
(D) Includes the awkward phrase being that. Also, prices are not said to lessen in amount,
but rather decline or lower.
(E) The phrase considering the fact that is wordy, and it distorts the meaning of the original
version, unfairly suggesting that the lessening demand for alternative energy products is
surprising.
Question 10
People in the north central region of the United States use certain utterances that distinguish
their speech from other regions.
(A) distinguish their speech from
(B) distinguishes their manner of speaking from
(C) distinguish their speech from that of
(D) distinguish the way they speak from
(E) distinguishes their speech from those of
Analysis
The correct response is ©. The original sentence (A) makes an illogical comparison between
speech and region. (C) corrects the problem in the original version by adding that of.
(B) and (D) each fail to correct the illogical comparison between speech and region. Also, (B)
incorrectly uses the singular verb distinguishes instead of the plural form.
(E) corrects the illogical comparison. However, (E) incorrectly uses the singular verb
distinguishes. The verb must agree with its plural subject utterances. (E) also incorrectly uses
those instead of the correct relative pronoun that (to refer to the singular speech).
(Adopted from http://www.west.net)
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The given information is compiled from various offline / online sources, towards the sole
purpose of knowledge sharing.
17. Managing multicultural business partners
Managing Culture The word Culture is derived from the Latin words cultura which stems from colere, meaning
―to cultivate‖ and has different meanings.
However, the word ―culture‖ is most commonly used in three basic senses:
Excellence of taste in the fine arts and humanities, also known as high culture
An integrated pattern of human knowledge, belief, and behavior that depends upon the
capacity for symbolic thought and social learning
The set of shared attitudes, values, goals, and practices that characterizes an
institution, organization or group
The meaning of culture is highly misunderstood and misused. Culture is a Way of Life
encompassing language, arts & science, thought, spirituality, social activity and interaction
aimed in satisfying the needs.
In 1943, Abraham Maslow outlined the hierarchy of human needs through his Theory of
Motivation as follows:
In Business, managing cultures is converging through divergence.
Following are the few tips for effectively managing the cultures.
1. We are all different. Use the differences to satisfy the human needs to achieve
organizational convergence.
2. Respect other culture.
3. Understand other culture
4. Never criticize other‘s religion. Have tolerance.
5. Respect each other‘s food habits and food preferences.
6. Try to match, acclimatize your culture with your partner‘s.
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The given information is compiled from various offline / online sources, towards the sole
purpose of knowledge sharing.
7. Never make fun or jeer at the language. If possible try to learn your partner‘s language
and way of life.
Managing Time: 1. Time is money including your partner‘s.
2. If you cannot manage time, you can manage nothing. Schedule your appointments.
3. Work ahead to meet the deadlines.
4. Be punctual. Make it a culture to abide by time.
5. Have a wrist watch that shows local time. Adjust accordingly. Otherwise like Diego
Maradonna, have two watches on your two wrists.
6. Be aware of time differences. Follow the local culture. Know when to call and when not
to call. Know whether to call office phone or mobile phone.
7. Be flexible to change.
8. Never call at late hours. Do not be a disturbance.
9. Never argue on telephone.
10. Be brief. Brevity is the wit of the soul. Always maintain.
11. It is preferable to be a few minutes ahead of appointment time than being late.
12. Finally, stick to your appointments. Never cancel.
Managing entertainment: 1. Be a good listener. Do not babble.
2. Be able to laugh. Be genuinely interested in your partner.
3. Encourage your guest or partner to talk.
4. Know your partner well. Make efforts. Get to know the likes and dislikes.
5. Never be a miser but it does not mean that you should be a spendthrift.
6. Plan your entertainment based on the returns.
7. Do not drink more than you can swallow. Be within your limits.
8. Never take your guest to a place where you had not been there.
9. Plan, Organize and Control the entertainment event. Be prepared for all eventualities.
10. Follow basic courtesies and table manners.