Q2 - Price: A corporation's primary responsibility

[ohthatpatrick]

Question Type:
ID the Disagreement

Stimulus Breakdown:
Price: A corp's primary concern is its shareholders, since THEY have the most at stake (they lose their investment if company goes broke).
Albrecht: Shareholders rarely invest in only one company (so they can probably afford to lose their investment in ONE failed company). Meanwhile, employees usually only have one job/career, so the corporation's primary responsibility should be to them.

Answer Anticipation:
It's easy to prephrase this disagreement as "Is a corporation's primary responsibility to its shareholders or to its employees"? Because this is only Q2 in the section, maybe they'll let it be that easy, but typically if the disagreement is THIS explicit, the correct answer will find a way to rank the reasons why each person arrived at a different conclusion against each other. So a trickier answer might be "a corporation needs to care more about losing investors' money than it does about losing the very livelihood of its employees".

Correct Answer:
D

Answer Choice Analysis:
(A) Both parties would probably agree to this. The disagreement is about who matters MORE, not who matters.

(B) Both parties would probably agree to this. The disagreement is about who matters MORE, not who matters.

(C) Neither person talks about how an investor would recoup losses after bankruptcy.

(D) "MORE at stake" looks like the head to head language we're after: shareholders or employees? Which one is the primary responsibility? Which one is MORE important? Price would presumably say "YES" to (D) and Albrecht would presumably say "NO".

(E) Neither person said this.

Takeaway/Pattern: (D) is an interesting answer since it's a little bit off the page. It's definitely the closest idea we get to "who matters more: shareholders or employees?" The idea of "more AT STAKE" is a bit new, but it's within the realm of common sense to understand two arguments speaking to that idea.

#officialexplanation

[tzyc]

I do not understand why (D) is the right answer...
From (D) it seems the part "They are its most important...risk" of Price disagrees with some argument of Albrecht, but I do not see where Albrecht gives different opinions about that...
Thank you.

[ohthatpatrick]

These questions, at their most annoying, give us a correct answer that's based on the reasons WHY people disagree, not the actual statement of disagreement.

Consider this example:
John - Chocolate is the best ice cream, because its flavor is the richest.

Alex - Not so! Vanilla is the best ice cream, because it can be paired with other foods, such as sodas, pies, and cakes.

Obviously they disagree about which ice cream is best.

So if they gave us an answer that read:
(D) chocolate is the best flavor

we'd pick it.

BUT --- they can also write an answer based on the underlying rationale for the disagreement. So if they gave us an answer that read:
(D) fullness of flavor is more important than an ice cream flavor's versatility of serving options.

We could also pick that. We know that John agrees with that, since his reason for picking chocolate was 'rich flavor', and we know that Alex disagrees with that, since his reason for picking vanilla was 'can be paired up with other foods'.

So in Q2, we see the explicit disconnect as this:
Price - Corp's primary responsibility is to shareholders
Albrecht - Corp's primary responsibility is to employees

Unfortunately, none of these answers discuss "primary responsibility". So if we dig deeper and look at the reasons why, we get:

Price - Corp's primary responsibility is to shareholders
(Why? they take the greatest risks)

Albrecht - Corp's primary responsibility is to employees
(Why? Shareholders have diversified portfolios while for employees the health of the corporation represents their very livelihood)

Those reasons offered disagree with each other.

Based on what Albrecht says, we know he disagrees with
1. "Corp's primary responsibility is to its shareholders"
and
2. "The shareholders take the greatest risks"

Albrecht would agree that if a corporation goes bankrupt, that the shareholders lose their investment. But he would say, "lucky for them, they have diverse investment portfolios, so that's just one failed investment, which can potentially be offset by other successful investments".

Meanwhile, if a corporation goes bankrupt, the employees lose "their very livelihood". They don't seem to have anything else to cushion the blow.

So (D) deals with #2. We know Price agrees with (D) because he said "they take the greatest risks". We know Albrecht disagrees because he contrasts the "diverse portfolio" of shareholders with the "very livelihood" of employees.

It's not explicitly said that the employees have 'more at stake', but LSAT allows us to read-in that common sense interpretation.

Hope this helps.

[tzyc]

Thank you so much for the detailed explanation!
Let me double check one thing...
So I originally chose (A), but (A) is wrong because it does not say "primary" right?
Since it does not say it, Albrecht might agree with (A) too...might say yes they have responsibility but it's not "primary"...is this correct?
Thank you

[ManhattanPrepLSAT1]

Exactly right tz_strawberry!