List of top Verbal Ability & Reading Comprehension (VARC) Questions asked in CAT

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How quickly things change in the technology business! A decade ago, IBM was the awesome and undisputed king of the computer trade, universally feared and respected. A decade ago, two little companies called Intel and Microsoft were mere blips on the radar screen of the industry, upstart start-ups that had signed on to make the chips and software for IBM’s new line of personal computers. Though their products soon became industry standards, the two companies remained protected children of the market leader.

What happened since is a startling reversal of fortune. IBM is being ravaged by the worst crisis in the company’s 79 year history. It is undergoing its fifth restructuring in the past seven years as well as seemingly endless rounds of job cuts and firings that have eliminated 100,000 jobs since 1985. Last week IBM announced to its shell-shocked investors that it lost \$4.97 billion last year – the biggest loss in American corporate history.

And just when IBM is losing ground in one market after another, Intel and Microsoft have emerged as the computer industry’s most fearsome pair of competitors. The numbers on Wall Street tell a stunning story. Ten years ago, the market value of the stock of Intel and Microsoft combined amounted to about a tenth of IBM’s. Last week, with IBM’s stock at an 11-year low, Microsoft’s value surpassed its old mentor’s for the first time ever (\$26.76 billion to \$26.48 billion) and Intel (\$24.3 billion) is not far behind. While IBM is posting losses, Intel’s profits jumped 30% and Microsoft’s rose 44%.

Both Intel, the world’s largest supplier of computer chips, and Microsoft, the world’s largest supplier of computer software, have assumed the role long played by Big Blue as the industry’s pacesetter. What is taking place is a generational shift unprecedented in the information age – one recalls a transition in the US auto industry 70 years ago, when Alfred Sloan’s upstart General Motors surpassed Ford Motor as America’s No. 1 car maker. The transition also reflects the decline of computer manufacturers such as IBM, Wang, and Unisys and the rise of companies like Microsoft, Intel, and AT\&T that create the chips and software to make the computers work. “Just like Dr. Frankenstein, IBM created these two monster competitors,” says Richard Shaffer, publisher of the Computer Letter. “Now even IBM is in danger of being trampled by the creations it unleashed.”

Although Intel and Microsoft still have close relationships with Big Blue, there is little love lost between IBM and its potent progeny. IBM had an ugly falling-out with former partner Microsoft over the future of personal computer software. Microsoft developed the now famous disk operating system for IBM-PC – called DOS – and later created the operating software for the next generation of IBM personal computers, the Personal System/2. When PS/2 and its operating system, OS/2, failed to catch on, a feud erupted over how the two companies would upgrade the system. Although they publicly patched things up, the partnership was tattered. IBM developed its own version of OS/2, which has so far failed to capture the industry’s imagination. Microsoft’s competing version, dubbed New Technology, or NT, will debut in a few months and will incorporate Microsoft’s highly successful Windows program, which lets users juggle several programs at once. Windows NT, however, will offer more new features, such as the ability to link many computers together in a network and to safeguard them against unauthorized use.

IBM and Intel have also been parting company. After relying almost exclusively on the Santa Clara, California company for the silicon chips that serve as computer brains, IBM has moved to reduce its dependence on Intel by turning to competing vendors. In Europe, IBM last year began selling a low-cost line of PCs called Ambra, which runs on chips made by Intel rival Advanced Micro Devices. IBM also demonstrated a sample PC using a chip made by another Intel enemy, Cyrix. And that October IBM said it would begin selling the company’s own chips to outsiders in direct competition with Intel.

IBM clearly feels threatened. And the wounded giant still poses the biggest threat to any further dominance by Intel and Microsoft. Last year, it teamed up with both companies' most bitter rivals – Apple Computers and Motorola – to develop advanced software and microprocessors for a new generation of desktop computers. In selecting Apple and Motorola, IBM bypassed its longtime partners. Just as Microsoft’s standard operating system runs only on computers built around Intel’s computer chips, Apple’s software runs only on Motorola’s chips. Although IBM has pledged that the new system will eventually run on a variety of machines, it will initially run only computer programs written for Apple’s Macintosh or IBM’s OS/2. Its competitive juice now flowing, IBM last week announced that it and Apple Computer will deliver the operating system in 1994 – a year ahead of schedule.

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Environmental protection and management is deservedly attracting a lot of attention these days. This is a desirable development in the face of the alarming rate of natural resource degradation which greatly hampers their optimal utilization. When waste waters emanating from municipal sewage, industrial effluent, agriculture and land runoffs, find their way either to ground water reservoirs or other surface water sources, the quality of water deteriorates, rendering it unfit for use. The natural balance is disturbed when concentrated discharges of waste water is not controlled. This is because the cleansing forces of nature cannot do their job in proportion to the production of filthy matter.

According to the National Environment Engineering and Research Institute (NEERI), a staggering 70 percent of water available in the country is polluted. According to the Planning Commission, ``From the Dal lake in the North to the Chaliyar river in the South, from Damodar and Hoogly in the East to the Thane Creek in the West, the picture of water pollution is uniformly gloomy. Even our large perennial rivers, like the Ganga, are today heavily polluted."

According to one study, all the 14 major rivers of India are highly polluted. Besides the Ganga, these rivers include the Yamuna, Narmada, Godavari, Krishna and Cauvery. These rivers carry 85 percent of the surface runoff and their drainage basins cover 73 percent of the country. The pollution of the much revered Ganga is due in particular to municipal sewage that accounts for three-fourths of its pollution load. Despite India having legislation on water pollution (The Water Prevention and Control of Pollution Act, 1974) and various water pollution control boards, rivers have today become synonymous with drains and sewers.

Untreated community wastes discharged into water courses from human settlements account for four times as much waste water as industrial effluent. Out of India’s 3,119 towns and cities, only 217 have partial (209) or full (8) sewerage treatment facilities and cover less than a third of the urban population. Statistics from a report of the Central Board for Prevention and Control of Water Pollution reveal that 1,700 of 2,700 water-using industries in India are polluting the water around their factories. Only 160 industries have waste water treatment plants. One estimate suggests that the volume of waste water of industrial origin will be comparable to that of domestic sewerage in India by 2000 AD. Discharges from agricultural fields, which carry fertilizing ingredients of nitrogen, phosphorous and pesticides, are expected to be three times as much as domestic sewage. By that date, thermal pollution generated by discharges from thermal power plants will be the largest in volume.

Toxic effluents deplete the levels of oxygen in the rivers, endanger all aquatic life and render water absolutely unfit for human consumption, apart from affecting industrial production. Sometimes these effects have been disastrous. A recent study reveals that the water of the Ganga, Yamuna, Kali and Hindon rivers have considerable concentrations of heavy metals due to inflow of industrial wastes, which pose a serious health hazard to the millions living on their banks. Similarly, the Cauvery and Kapila rivers in Karnataka have been found to contain metal pollutants, which threaten the health of people in riverine towns. The Periyar, the largest river of Kerala, receives extremely toxic effluent that results in high incidence of skin problems and fish kills. The Godavari of Andhra Pradesh and the Damodar and Hoogly in West Bengal receive untreated industrial toxic wastes. A high level of pollution has been found in the Yamuna, while the Chambal of Rajasthan is considered the most polluted river in Rajasthan. Even in industrially backward Orissa, the Rushikula river is extremely polluted. The fate of the Krishna in Andhra Pradesh, the Tungabhadra in Karnataka, the Chaliyar in Kerala, the Gomti in U.P., the Narmada in M.P. and the Sone and the Subarnarekha rivers in Bihar is no different.

According to the W.H.O., eighty percent of diseases prevalent in India are water-borne; many of them assume epidemic proportions. The prevalence of these diseases heightens under conditions of drought. It is also estimated that India loses as many as 73 million man-days every year due to water prone diseases, costing Rs.600 crore by way of treatment expenditure and production losses. Management of water resources with respect to their quality also assumes greater importance especially when the country can no more afford to waste water.

The recent Clean-the-Ganga Project with an action plan estimated to cost the exchequer Rs.250 crore (which has been accorded top priority) is a trendsetter in achieving this goal. The action plan evoked such great interest that offers of assistance have been received from France, UK, US and the Netherlands as also the World Bank. This is indeed laudable. Poland too has now joined this list. The very fact that these countries have volunteered themselves to contribute their mite is a healthy reflection of global concern over growing environmental degradation and the readiness of the international community to participate in what is a truly formidable task. It may be recalled that the task of cleansing the Ganga along the Rishikesh–Hardwar stretch under the first phase of the Ganga Action Plan has been completed and the results are reported to be encouraging.

The reasons for the crisis of drinking water resources are drying up and the lowering of ground water through overpumping; this is compounded by the pollution of water sources. All these factors increase the magnitude of the problem. An assessment of the progress achieved by the end of March 1985, on completion of the first phase of the International Drinking Water Supply and Sanitation Decade (1981–1991) reveals that drinking water has been available to 73 percent of the urban population and 56 percent of the rural population only. This means that nearly half the country’s rural population has to get drinking water facilities. This needs to be urgently geared up especially when considered against the Government’s professed objective of providing safe drinking water and sanitation to all by the end of the International Drinking Water Supply and Sanitation Decade i.e. March 1991. The foremost action in this would be to clean up our water resources.

As per surveys conducted by the NEERI, per capita drinking water losses in different cities in the country range between 11,000 to 31,000 litres annually. This indicates a waste level of 20 to 35 percent of the total flow of water in the distribution system primarily due to leaks in main and household service pipes. Preventive maintenance programme would substantially reduce losses, wastages and would certainly go a long way in solving the problem.

According to the Union Ministry of Works and Housing, of the 2.31 lakh problem villages, most have been provided with at least one source of drinking water as of March 1986. The balance (38,748) villages are expected to be covered during the seventh plan. A time-bound national policy on drinking water is being formulated by Government, wherein the task is proposed to be completed by the end of the seventh plan. An outlay of Rs.6,522.47 crores has been allotted for the water supply and sanitation sector in the seventh plan period against an outlay of Rs.3,922.02 crores in the sixth plan. Of this, outlay for rural water supply sector is Rs.3,454.47 crores. It is expected that this outlay would help to cover about 86.4 percent of the urban and 82.2 percent of the rural population with safe drinking water facilities by March 1991. Hygienic sanitation facilities would be provided to 44.7 percent and 1.8 percent of the urban and rural population respectively within the same period.

Read the passage carefully and choose the best answer for each question.

Management education gained new academic stature within US Universities and greater respect from outside during the 1960’s and 1970’s. Some observers attribute the competitive superiority of US corporations to the quality of business education. In 1978, a management professor, Herbert A. Simon of Carnegie Mellon University, won the Nobel Prize in economics for his work in decision theory. And the popularity of business education continued to grow, since 1960, the number of master’s degrees awarded annually has grown from under 5000 to over 50,000 in the mid 1980’s as the MBA has become known as ‘the passport to the good life’.

By the 1980’s, however, US business schools faced critics who charged that learning had little relevance to real business problems. Some went so far as to blame business schools for the decline in US competitiveness.

Amidst the criticisms, four distinct arguments may be discerned. The first is that business schools must be either unnecessary or deleterious because Japan does so well without them. Underlying this argument is the idea that management ability cannot be taught, one is either born with it or must acquire it over years of practical experience. A second argument is that business schools are overly academic and theoretical.
They teach quantitative models that have little application to real world problems. Third, they give inadequate attention to shop floor issues, to production processes and to management resources. Finally, it is argued that the encourage undesirable attitudes in students, such as placing value on the short term and ‘bottom line’ targets, while neglecting longer term development criteria. In summary, some business executives complain that MBAs are incapable of handing day to day operational decisions, unable to communicate and to motivate people, and unwillingly to accept responsibility for following through on implementation plans. We shall analyze these criticisms after having reviewed experiences in other countries.

In contrast to the expansion and development of business education in the United States and more recently in Europe, Japanese business schools graduate no more than two hundred MBAs each year. The Keio Business School (KBS) was the only graduate school of management in the entire country until the mid 1970’s and it still boasts the only two year masters programme. The absence of business schools in Japan would appear in contradiction with the high priority placed upon learning by its Confucian culture. Confucian colleges taught administrative skills as early as 1630 and Japan wholeheartedly accepted Western learning following the Meiji restoration of 1868 when hundreds of students were dispatched to universities in US, Germany, England and France to learn the secrets of western technology and modernization. Moreover, the Japanese educational system is highly developed and intensely competitive and can be credited for raising the literary and mathematical abilities of the Japanese to the highest level in the world.

Until recently, Japan corporations have not been interested in using either local or foreign business schools for the development of their future executives. Their in-company training programs have sought the socialization of newcomers, the younger the better. The training is highly specific and those who receive it have neither the capacity nor the incentive to quit. The prevailing belief, says Imai, ‘is a management should be born out of experience and many years of effort and not learnt from educational institutions.’ A 1960 survey of Japanese senior executives confirmed that a majority (54%) believed that managerial capabilities can be attained only on the job and not in universities.

However, this view seems to be changing: the same survey revealed that even as early as 1960. 37% of senior executives felt that the universities should teach integrated professional management. In the 1980’s a combination of increased competitive pressures and greater multi nationalisation of Japanese business are making it difficult for many companies to rely solely upon internally trained managers. This has led to a rapid growth of local business programmes and a greater use of American MBA programmes. In 1982-83, the Japanese comprised the largest single group of foreign students at Wharton, where they not only learnt the latest techniques of financial analysis, but also developed worldwide contacts through their classmates and became Americanized, something highly useful in future negotiations. The Japanese, then do not ‘do without’ business schools, as is sometimes contended. But the process of selecting and orienting new graduates, even MBAs, into corporations is radically different than in the US. Rather than being placed in highly paying staff positions, new Japanese recruits are assigned responsibility for operational and even
menial tasks. Success is based upon Japan’s system of highly competitive recruitment and intensive incompany management development, which in turn are grounded in its tradition of universal and rigorous academic education, life-long employment and strong group identification.

The harmony among these traditional elements has made Japanese industry highly productive and given corporate leadership a long term view. It is true that this has been achieved without much attention to university business education, but extraordinary attention has been devoted to the development of managerial skills, both within the company and through participation in programmes sponsored by the Productivity Center and other similar organizations.