Question

Directions: Read the following caselet and answer the question that follows.

According to recent reports, CEOs of large organisations are paid more than CEOs of small organisations. It does not seem fair that just because a CEO is heading a big organisation, he or she should be paid more. A CEO's salary should be tied to performance, especially growth in sales and profits. Big organisations are of course more complex to run than small ones, but every CEO puts in a large amount of energy and time managing the organisation. There is no proof that CEOs of big organisations face more stress than CEOs of small organisations. All CEOs should be paid according to their performance.

A person seeking to refute this argument might argue that

• A. CEOs should be paid equally.
• B. Managing a big organisation is more challenging than managing a small one.
• C. CEOs who travel more should be paid more.
• D. If the CEOs of small companies perform well, their companies would grow big, and so would the CEOs' salaries.

Hint:

Look for the option that gives a reason tied to organisation size itself, not one that agrees with paying by performance or brings in an unrelated factor like travel or education.

Answer 1

The Correct Option is B

Step 1: Understanding the Question:
The passage argues that CEO pay should depend only on performance, and rejects organisation size as a valid reason for paying big-company CEOs more. We must find the option that goes against this conclusion, that is, defends paying big-company CEOs more purely because they run bigger organisations.

Step 2: Key Formula or Approach:
Sort each option into one of three buckets: it agrees with the speaker (pay by performance), it is unrelated to the speaker's reasoning, or it gives an independent reason why size itself deserves more pay. Only the third bucket refutes the speaker.

Step 3: Detailed Explanation:
"CEOs should be paid equally" falls in the first bucket, since it is just a restatement of paying by performance regardless of size, so it cannot be the refutal.
"CEOs who travel more should be paid more" is in the second bucket, since travel is never discussed in the passage as a reason for the pay gap, so it does not engage with the speaker's claim at all.
"If small-company CEOs perform well, their companies would grow big and so would their pay" also falls in the first bucket, since the raise still comes from performance leading to growth, matching the speaker's own logic.
"Managing a big organisation is more challenging than managing a small one" falls in the third bucket, since it directly denies the speaker's claim that all CEOs need a similar amount of energy and time, and gives job difficulty, not performance, as the reason a big-company CEO should earn more.

Step 4: Final Answer:
Only the "more challenging" option provides an independent reason based on organisation size, so it is the statement that refutes the speaker's argument. This corresponds to option (BB).