Reading Comprehension

PT108 · S1 · P3 · Q17 Morality of Corporations

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Many people complain about corporations, but there are also those whose criticism goes further and who hold corporations morally to blame for many of the problems in Western society.

Topic

Whether corporations have moral responsibilities, and whether a CEO's only obligation is to maximize profits for owners.

Framework

Present Debate. The author presents the economists' position (CEOs should maximize profit; this serves the public good) and then argues against it, defending a moral-responsibility view.

Main Point

The economists are wrong: pursuing maximum profit does not always benefit the public, and a CEO's legal duty to owners does not override their moral responsibility to act for the public good.

P1: Setting up the debate

Some critics blame corporations morally for societal problems, including the basic practice of profit-maximizing without regard to the public good. Economists respond that this misapplies ethical principles to economic relationships.

P2: How responsibility actually works

Corporations aren't persons — their morality is the aggregated morality of the people who act on the corporation's behalf. In larger corporations, the CEO has a fiduciary obligation to the syndicate of owners.

P3: The economists' position

Economists say a CEO's sole responsibility is to the owners (whose primary interest is profit). Even if a CEO isn't obligated to maximize profits, the economists claim profit-maximizing is best for the public anyway.

17.

Which one of the following most accurately states the main point of the passage?

  1. Correct

    Although CEOs may be legally

    Why this is right

    This main clause of this answer is saying that "CEOs do still have moral responsibility, when it comes to the actions of the corporations they run." That fits the author's evaluation in the final paragraph of this broader debate we're having about how much moral accountability corporations do / don't have, The warm-up clause is a concession (although) that the author did make. While obligations such as those of corporate CEOs to corporate owners are binding in a business or legal sense, they are not morally paramount. There are two general questions being pondered in the passage: 1. to what extent are corporations or the people that run them morally accountable? 2. when corporations do what they're supposed to (pursue profits), does that lead to moral, beneficial outcomes? The text here about "considering the implications of the corporations' actions for the public good" is an acknowledgement of that whole discussion. Since the author believes that the profit motive can easily steer a corporation into actions that don't benefit the public, the author holds CEO's morally responsible for considering whether given actions, even if they increase profitability, should actually be taken.

    Skill tested: Main Point · how this choice captures the passage's function is the move to repeat next time.

    76% picked this

  2. Although morality is not easily

    Too Narrow

    This feels like it somewhat captures the author's position in the 2nd paragraph, but this answer has nothing to do with the discussion in the 4th / 5th paragraphs about the CEO's role and potential moral accountability. This answer doesn't even mention CEO's, even though the final two paragraphs repeatedly mention them.

    10% picked this

  3. Although economists argue that maximizing

    Wrong Emphasis / Wrong POV

    The main clause here is "a CEO's true obligation is to seek a profit". That sounds like the economists' point of view, not our author's.

    8% picked this

  4. Although some people criticize corporations

    Wrong Emphasis: non-author opinion

    The main clause here is just descriptive: "economists argue X". The author had her own opinion, so that has to take center stage.

    6% picked this

  5. Although critics of corporations argue

    Too Strong: always Opposite

    The main clause here is "financial decisions always benefit the public", which is both insanely strong and contradicts what the author is arguing at the beginning of the final paragraph.

    0% picked this

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