The Reasoning is in the Details


gmat reasoningWhich type of RC passage is your favorite “ social science, business, hard science? Just kidding! I know that most people don’t have a favorite type (though most of us have a least favorite type).

Let’s try one out. Because of space constraints, I’m not going to give you the full passage, but I promise I’ll give you everything you need to know in order to answer the question. This problem is from the free set of questions that comes with GMATPrep. Give yourself up to 1.5 minutes to read the passage excerpt and approximately another 1.5 minutes to answer the question.

*  The modern multinational corporation is described as having originated when the owner-managers of nineteenth-century British firms carrying on international trade were replaced by teams of salaried managers organized into hierarchies. Increases in the volume of transactions in such firms are commonly believed to have necessitated this structural change. Nineteenth-century inventions like the steamship and the telegraph, by facilitating coordination of managerial activities, are described as key factors. Sixteenth- and seventeenth-century chartered trading companies, despite the international scope of their activities, are usually considered irrelevant to this discussion: the volume of their transactions is assumed to have been too low and the communications and transport of their day too primitive to make comparisons with modern multinationals interesting.

In reality, however, early trading companies successfully purchased and outfitted ships, built and operated offices and warehouses, manufactured trade goods for use abroad, maintained trading posts and production facilities overseas, procured goods for import, and sold those goods both at home and in other countries. The large volume of transactions associated with these activities seems to have necessitated hierarchical management structures well before the advent of modern communications and transportation. For example (I’m going to stop you here! There are two more long sentences in this paragraph plus a third paragraph.)

Here’s the question:

The author lists the various activities of early chartered trading companies in order to

(A) analyze the various ways in which these activities contributed to changes in management structure in such companies

(B) demonstrate that the volume of business transactions of such companies exceeded that of earlier firms

(C) refute the view that the volume of business undertaken by such companies was relatively low

(D) emphasize the international scope of these companies’ operations

(E) support the argument that such firms coordinated such activities by using available means of communication and transport


Got your answer? Debating between two answers? Pick! The clock is ticking J

Let’s start with the passage. What did you get out of it? Here are my notes (as far as we read):

P1: MMC: 19c Brit int’l hierarch b/c of >> vol

16-17c: low vol, prim

P2: BUT 16-17 Cos did lots of stuff, >> vol

Note: at this point, while reading the second sentence of paragraph 2, I realized that the first paragraph was some other people theory “ that this hierarchy and MMC thing started in the 19th century “ but the author is disagreeing in the second paragraph. So now I have the author’s overall point and I’m going to add a couple of things to my already-written notes, like this:

P1: HYP: MMC: 19c Brit int’l hierarch b/c of >> vol

As: 16-17c: low vol, prim

P2: BUT 16-17 Cos did lots of stuff, >> vol, had hierarch already?

HYP means hypothesis, and As: means assumption coming! Note that I’m not using the word assumption in the same way I would on a critical reasoning problem. In critical reasoning, assumptions are unstated. Here, this assumption actually was stated “ the author is pointing out what some people assume to be true (but the author disagrees!).

Okay, on to our question. The question stem mentions a particular group: early chartered trading companies. Oh no! I didn’t write that down. What should I do?

If I have to, I’ll start scanning for the most unusual word: chartered. But hang on a second. The question describes these companies as early companies so they’re probably talking about the older, longer-ago timeframe, the supposedly irrelevant time. That was in the second half of paragraph 1 and the beginning of paragraph 2, so I’ll check there first.

Bingo! CTCs (chartered trading companies). We’re in business. Next, let’s see, the question asks about the various activities of these companies, right?

Sort of. But there’s a key distinction to note, here. The question doesn’t ask what the activities are or what they author says about the activities. This question is not a what question at all; rather, it’s a WHY question. Why does the author take the time to list all of these different activities? He’s trying to make a certain point “ what is that point?

These why questions are a variation on the more typical what specific detail questions. It’s important to notice when the question is asking why as opposed to what “ this can change the answer completely. What are you studying? Why are you studying it? Completely different answers!

First, find the location where the author lists these activities. Then pay attention both to how the author introduces the list and anything that he might say or summarize afterwards. Before you read the answer choices, try to formulate your own idea of why the author bothered to list all of these activities.

In this case, the list can be found in the first sentence of the second paragraph. The sentence begins in reality, however “ that is, contrast language. The author is clearly commenting on something that came earlier in the passage, most likely in the sentence before. Further, the author definitely disagrees with whatever that thing was. Now we just need to figure out what it was!

The last sentence of the first paragraph indicates that the old CTCs are usually considered irrelevant to the hierarchy thing for two reasons: (1) low volume of trade, and (2) primitive communications and transport. Immediately after that, the author starts with in reality, however “ so he must think that at least one of those two things really isn’t the way it was.

Next we have a long list of things, but no commentary until we get to the next sentence. Here, the author states that these activities constituted a large volume of trade, contradicting what the previous paragraph said, and the author then ties that to the idea of the hierarchy thing. (I’m sure you’ve noticed that I keep calling the first paragraph’s theory the hierarchy thing. I don’t want to get caught up in that, so this is really how I’d think about it while trying to find the answer to this question. In fact, I’m not 100% sure that I fully understand the hierarchy thing yet “ but I don’t care right now because the question didn’t ask about that.)

Okay, I think I have an idea of why the author listed all these activities “ because they show that the volume of trade was actually high, not low. More broadly speaking, the author listed these activities in order to contradict what the proponents of the other theory believe. Time to check my answer choices.

(A) analyze the various ways in which these activities contributed to changes in management structure in such companies

Hmm. Analyzing all the ways in which this list of like 6 or 8 things then impacted management structure? That would be tough to do in a paragraph, let alone a sentence “ this is way too specific / detailed. Eliminate A.

(B) demonstrate that the volume of business transactions of such companies exceeded that of earlier firms

Trap! It’s true that the people who believe the MNC theory think that the 19th century firms did more business than the older CTCs “ but this question asks about the older firms, and the passage doesn’t talk about any even earlier companies. Eliminate B.

(C) refute the view that the volume of business undertaken by such companies was relatively low

Refute “ that’s good, the author is trying to contradict something. Yes, this is pretty much what I said before: he’s saying that the other people are wrong to assume that the trade volume was low for these CTCs. This one looks good, but I’ll just glance at D and E to make sure.

(D) emphasize the international scope of these companies’ operations

Ooh, tricky one. The passage does talk about international trade. Both the other people and the author, though, already acknowledge that the CTCs were carrying on international trade “ that’s not the point of dispute between the two theories. Not good enough! Eliminate D.

(E) support the argument that such firms coordinated such activities by using available means of communication and transport

Another trap. These words are all in the argument “ communication, transport, etc. The author is trying to dispute something, though, not support it. The other people claimed that communication and transport were primitive, and the author does at least acknowledge that these areas were lacking. The second sentence of paragraph 2 says that there was a high trade volume before the advent of modern communications and transport. In other words, the author is specifically disputing the trading volume claim, not the claim about communications and transport.

The correct answer is C.

Key Takeaways for Why Specific Detail Problems

(1) Notice that you have a why question rather than a what question. Most commonly, why questions will mention the author and end with in order to “ that’s a dead giveaway that you have a why question. Why do you study? In order to get a good score.

(2) Use your notes and your knowledge of the overall message to find the appropriate sentences in the passage. You’ll probably need to read 2 or 3 sentences in order to formulate your own idea as to why the author talked about XYZ.

(3) Look for a match! After you’ve formulated your own idea, try to find an answer choice with the same message. Note that your language almost certainly won’t match exactly the language in the passage “ rather, you’re looking for a matching message, or point, in the answers.


* GMATPrep questions courtesy of the Graduate Management Admissions Council. Usage of this question does not imply endorsement by GMAC.

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