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Standard X
Civics
Corporate Strategies
The passage i...
Question

The passage implies that which of the following is a possible consequence of a company's adoption of innovations that increase its ecoefficiency?

A
Company profits resulting from such innovations may be reinvested in that company with no guarantee that the company will continue to make further improvements in ecoefficiency.
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B
Company growth fostered by cost savings from such innovations may allow that company to manufacture a greater number of products that will be used and discarded, thus worsening environmental stress.
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C
A company that fails to realize significant cost savings from such innovations may have little incentive to continue to minimize the environmental impact of its production processes.
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D
A company that comes to depend on such innovations to increase its profits and growth may be vulnerable in the global market to competition from old-style eco-inefficient industries.
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E
A company that meets its ecoefficiency goals is unlikely to invest its increased profits in the development of new and innovative ecoefficiency measures.
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Solution

The correct option is B Company growth fostered by cost savings from such innovations may allow that company to manufacture a greater number of products that will be used and discarded, thus worsening environmental stress.
Option B) Company growth fostered by cost savings from such innovations may allow that company to manufacture a greater number of products that will be used and discarded, thus worsening environmental stress is the correct answer as the passage talks about Eco-efficiency
The other options are incorrect as none of these consequences is mentioned in the passage.

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Q. Companies that are registered in one country but operate in another help in the transfer of new innovations and technologies to the country that they enter.

What are such companies known as?
Q. The passage mentions which of the following as a possible consequence of companies' realization of greater profits through ecoefficiency?
Q. Read the following passage and answer the (three) items that follow:
Modern manufacturers, who need reliable sources of materials and technologically advanced components to operate profitably, face an increasingly difficult choice between owning the producers of these items (a practice known as backward integration) and buying from independent producers. Manufacturers who integrate may reap short-term rewards, but they often restrict their future capacity for innovative product development. Backward integration removes the need for some purchasing and marketing functions, centralizers overhead, and permits manufacturers to eliminate duplicated efforts in research and development. Where components are commodities (ferrous metals or petroleum, for example), backward integration almost certainly boosts profits. Nevertheless, because product innovation means adopting the most technologically advanced and cost-effective ways of making components, backward integration may entail a serious risk for a technologically active company-for example, a producer of sophisticated consumer electronics. A company that decides to make rather than buy important parts can lock itself into an outdated technology. Independent suppliers may be unwilling to share innovations with assemblers with whom they are competing. Moreover, when an assembler sets out to master the technology of producing advanced components, the resulting demands on its resources may compromise its ability to assemble these components successfully into end products. Long-term contracts with suppliers can achieve many of the same cost benefits as backward integration without compromising a company’s ability to innovate. However, moving away from backward integration is not a complete solution either. Developing innovative technologies requires independent suppliers of components to invest huge sums in research and development. The resulting low profit margins on the sale of components threaten the long-term financial stability of these firms. Because the ability of end-product assemblers to respond to market opportunities depends heavily on suppliers of components, assemblers are often forced to integrate by purchasing the suppliers of components just to keep their suppliers in business.

Which of the following best describes the way the last paragraph functions in the context of the passage?


Q.

Statement: The company has decided to increase the price of all its products to tackle the precarious financial position.

Assumptions:

I. The company may be able to wipe out the entire losses incurred earlier by this decision.

II. The buyers may continue to buy its products even after the increase.

III. The company has adequate resources to continue production for few more months.


Q. Read the following passage and answer the (three) items that follow:
Modern manufacturers, who need reliable sources of materials and technologically advanced components to operate profitably, face an increasingly difficult choice between owning the producers of these items (a practice known as backward integration) and buying from independent producers. Manufacturers who integrate may reap short-term rewards, but they often restrict their future capacity for innovative product development. Backward integration removes the need for some purchasing and marketing functions, centralizers overhead, and permits manufacturers to eliminate duplicated efforts in research and development. Where components are commodities (ferrous metals or petroleum, for example), backward integration almost certainly boosts profits. Nevertheless, because product innovation means adopting the most technologically advanced and cost-effective ways of making components, backward integration may entail a serious risk for a technologically active company-for example, a producer of sophisticated consumer electronics. A company that decides to make rather than buy important parts can lock itself into an outdated technology. Independent suppliers may be unwilling to share innovations with assemblers with whom they are competing. Moreover, when an assembler sets out to master the technology of producing advanced components, the resulting demands on its resources may compromise its ability to assemble these components successfully into end products. Long-term contracts with suppliers can achieve many of the same cost benefits as backward integration without compromising a company’s ability to innovate. However, moving away from backward integration is not a complete solution either. Developing innovative technologies requires independent suppliers of components to invest huge sums in research and development. The resulting low profit margins on the sale of components threaten the long-term financial stability of these firms. Because the ability of end-product assemblers to respond to market opportunities depends heavily on suppliers of components, assemblers are often forced to integrate by purchasing the suppliers of components just to keep their suppliers in business.

According to passage, when an assembler buys a firm that makes some important component of the end product that the assembler produces, independent suppliers of the same component may-


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