rc2 - Practice Test#2 Reading Comprehension(17 Essays 57...

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Practice Test #2 Reading Comprehension (17 Essays, 57 Questions)   Essay #1.  009 (21233-!-item-!-188;#058&00009-00) The modern multinational corporation is described as having originated when the owner- managers of nineteenth-century British firms carrying on international trade were replaced by  teams of salaried managers organized into hierarchies.  Increases in the volume of transactions  in such firms are commonly believed to have necessitated this structural change.  Nineteenth- century inventions like the steamship and the telegraph, by facilitating coordination of managerial  activities, are described as key factors. Sixteenth- and seventeenth-century chartered trading  companies, despite the international scope of their activities, are usually considered irrelevant to  this discussion:  the volume of their transactions is assumed to have been too low and the  communications and transport of their day too primitive to make comparisons with modern  multinationals interesting. In reality, however, early trading companies successfully purchased and outfitted ships, built and  operated offices and warehouses, manufactured trade goods for use abroad, maintained trading  posts and production facilities overseas, procured goods for import, and sold those goods both at  home and in other countries.  The large volume of transactions associated with these activities  seems to have necessitated hierarchical management structures well before the advent of  modern communications and transportation.  For example, in the Hudson's Bay Company, each  far-flung trading outpost was managed by a salaried agent, who carried out the trade with the  Native Americans, managed day-to-day operations, and oversaw the post's workers and  servants.  One chief agent, answerable to the Court of Directors in London through the  correspondence committee, was appointed with control over all of the agents on the bay. The early trading companies did differ strikingly from modern multinationals in many respects.  They depended heavily on the national governments of their home countries and thus  characteristically acted abroad to promote national interests.  Their top managers were typically  owners with a substantial minority share, whereas senior managers' holdings in modern  multinationals are usually insignificant.  They operated in a preindustrial world, grafting a system  of capitalist international trade onto a premodern system of artisan and peasant production.  Despite these differences, however, early trading companies organized effectively in remarkably  modern ways and merit further study as analogues of more modern structures. Question #1.  009-01 (21279-!-item-!-188;#058&000009-01) The author's main point is that (A) modern multinationals originated in the sixteenth and seventeenth centuries with the  establishment of chartered trading companies (B) the success of early chartered trading companies, like that of modern multinationals, 
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depended primarily on their ability to carry out complex operations (C) early chartered trading companies should be more seriously considered by scholars studying  the origins of modern multinationals (D) scholars are quite mistaken concerning the origins of modern multinationals (E) the management structures of early chartered trading companies are fundamentally the same  as those of modern multinationals 
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