QUESTION TEXT: Business ethicist: Managers of corporations have an…
QUESTION TYPE: Sufficient Assumption
CONCLUSION: Managers should act in the best interest of shareholders.
REASONING: Managers should act in the way that shareholders would want them to act.
ANALYSIS: In sufficient assumption questions, you have to close the gap between evidence and conclusion. Look at the conclusion and reasoning above.
They talk about two different things: what shareholders want, and the best interests of shareholders.
It may seem like a stretch, but you can’t assume that shareholders want what’s in their best interest. Maybe they’re irrational, or they don’t realize what’s in their best interest.
You can prove the argument correct by showing that shareholders do want what’s in their best interest.
- This only affects whether managers can fulfill that obligation. It doesn’t tell us whether they have that obligation.
- CORRECT. This connects the premise to the conclusion.
- It doesn’t matter which obligation is most important, as long as managers do have an obligation to shareholders.
- This uses the word ‘best’ in a different sense. The stimulus talked about serving shareholders’ best interests (helping shareholders). This answer talks about who can best serve shareholders. That refers to who can help them the most.
- This doesn’t tell us that managers should act in shareholders’ best interests. It just makes it easier to do so.
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