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

The speaker's argument is that CEO pay should depend on performance, not on the size of the organisation, because running a small company also takes a large amount of energy and time and there is no evidence that big-company CEOs face more stress. To refute (attack) this argument, an option must give a real reason why the size of the organisation itself, and not just performance, justifies a difference in pay.

1. CEOs should be paid equally: this agrees with the speaker's own conclusion, that pay should track performance and not size, so it supports the argument instead of refuting it.
2. Managing a big organisation is more challenging than managing a small one: this directly contradicts the speaker's claim that all CEOs need a similar amount of energy and time. If bigger organisations really are harder to run, paying their CEOs more is justified by the job itself, not just by performance. This is a genuine reason to refute the argument.
3. CEOs who travel more should be paid more: travel is never mentioned in the passage as a reason for the pay gap, so this option is not connected to the speaker's reasoning at all and cannot refute it.
4. If the CEOs of small companies perform well, their companies would grow big, and so would the CEOs' salaries: this is consistent with paying CEOs on performance, since the pay rises only after the company, and hence the job, grows. It supports the speaker's stand rather than opposing it.

Only the "more challenging" option gives a reason tied to the size of the organisation itself, which is exactly what the speaker denies. This is the one statement that weakens the claim that pay should be based only on performance.

Let's summarize:

• A refutal must attack the speaker's actual claim, that organisation size does not justify higher pay.
• Only the option about the job being harder in a big organisation does this; the rest either agree with the speaker or bring in unrelated factors like travel or education.

So the correct option is "Managing a big organisation is more challenging than managing a small one."