PT1.S4.Q23 - Mr. Blatt: Expert consultants are sought after

Comments

• khandelwal.43 Core Member

  April 2022 11 karma

  Why is it not D because if the expert consultant found that it did not save much, then the consultant is taking some of the risk

  Mr. Blatt: Expert consultants are sought after by
  management because they help
  executives make better decisions. That is
  why they are worth the substantial fees
  they charge.
  Ms. Fring: Nonsense. Expert consultants are hired
  in order to enable executives to avoid
  responsibility. The more the experts cost,
  the more they can be blamed when things
  go wrong.
  Which one of the following, if it occurred, would be
  the strongest evidence favoring Ms. Fring's position
  over Mr. Blatt's position?
  (A)
  (B)
  (C)
  (E)
  A. A company that is trying to decide whether to
  move its manufacturing plant hires an
  expensive expert to conduct a cost/benefit
  analysis.
  B. Two competing companies faced with very
  similar problems adopt different solutions, one
  with the help of a consultant, one without.
  C. A successful firm of expert consultants seeks to
  increase its volume of business by reducing its
  fees, but its volume of business drops.
  D. An expert consultant builds up a successful
  business by charging clients a substantial
  percentage of the amount an independent
  assessor judges that the consultant saved the
  company
  E. A company follows a consultant's advice to
  open two new stores, but both stores are only
  marginally profitable at first.