Reading Comprehension

PT108 · S1 · P3 · Q20 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.

20.

The conception of morality that underlies the author's argument in the passage is best expressed by which one of the following principles?

  1. Correct

    What makes actions morally right

    Why this is right

    This reads pretty strong, so on a first pass it might not be that appealing. But the final two sentences are clearly treating "detracting from the public good" as a synonym for "immoral". [the CEO can say to the owner that] certain courses of action should not be taken because they are likely to detract from the public good. The consequences the CEO may face for doing so do not excuse the CEO from the responsibility to act morally. In other words, acting morally is "don't do the profitable course of action that would detract from the public good".

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

    86% picked this

  2. An action is morally right

    Bad Trigger Match

    The author wasn't saying that "because a CEO may face a penalty for prioritizing the public good over profits, that penalty makes it a moral action". The author was saying, "despite the fact that the CEO may incur a penalty for doing so, the CEO should act morally, which means they should prioritize the public good over profits".

    1% picked this

  3. Actions are morally right if

    Out of Scope: fraudulent / illegal

    This also has a bad trigger match, because it's a totally out of scope concept. The author was never saying that CEO's are acting morally, as long as their actions are not fraudulent or illegal. Those concepts don't come up in the author's discussion of a CEO's moral responsibility, at the end of the passage.

    1% picked this

  4. It is morally wrong to

    Too Strong

    The author thinks that the pursuit of corporate interest could easily go against the public good, but she also acknowledges that it often contributes to the public good. Thus, she doesn't have a maximalist stance like "whenever you try to maximize personal gain, you are doing something morally wrong." She is just saying sometimes corporations who are trying to maximize financial gain could take actions that contravene the public good, and in those cases a CEO is morally responsible for resisting such actions.

    3% picked this

  5. Actions are not morally wrong

    Bad Premise / Conclusion Match

    This answer is saying if action X doesn't ⇢ then action X is harm anyone not morally wrong The author was never trying to prove that something was not morally wrong. The author was saying it would be morally right for a CEO to resist taking an action that might help profitability but impede the public good. And the author was saying it would be morally wrong to pursue profits over public good. The concept of "harm" is pretty out of scope. It's implied that "decimating a forest" or "polluting a lake" would do some harm to the public good, but it's more in the form of ruining ecological resources. It's not a sense of directly harming others.

    8% picked this

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