Question

Mr. Brijesh: A public sector company 'ABC' was privatised 3 years ago. It has increased profitability since then. This is a clear indication that industries will fare better in the private sector than in the public sector.
Mr. Sinha: That's wrong. Closer perusal of ABC's balance sheets shows that it has been profitable since the appointment of a professional managing director 3 years ago, while it was still in the public sector.
Which best describes the weakness in Mr. Brijesh's judgement which Mr. Sinha is using?

• A. Brijesh's evidence is of a single company
• B. Professional management whether in a private or public sector company can earn more profits
• C. Profitability of ABC may be temporary
• D. No examples of profit making private sector companies was cited by him

Answer 1

The Correct Option is B

Mr. Brijesh argues that the privatization of the public sector company 'ABC' led to increased profitability, suggesting that private sectors perform better. Mr. Sinha counters that ABC was already profitable due to the appointment of a professional managing director before privatization, indicating that management, not privatization, caused the improvement.

The main weakness in Mr. Brijesh's judgment is that he fails to recognize that professional management, whether in private or public sectors, can drive profits. Thus, his conclusion about privatization may be flawed.
The correct answer is (B) : Professional management whether in a private or public sector company can earn more profits