CAT Questions | CAT Paragraph Completion Questions

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Question 12: The East India Company no longer exists, and it has, thankfully, no exact modern equivalent. Walmart, which is the world’s largest corporation in revenue terms, does not number among its assets a fleet of nuclear submarines; neither Facebook nor Shell possesses regiments of infantry. Yet the East India Company – the first great multinational corporation, and the first to run amok – was the ultimate model for many of today’s joint-stock corporations. The most powerful among them do not need their own armies: they can rely on governments to protect their interests and bail them out. The East India Company remains history’s most terrifying warning about the potential for the abuse of corporate power – and the insidious means by which the interests of shareholders become those of the state. Three hundred and fifteen years after its founding, its story has never been more current.

1. The East India Company's story is the first example of a nation state extracting, as its price for saving a failing corporation, the right to regulate and severely rein it in.
2. For all the power wielded today by the world’s largest corporations – whether ExxonMobil, Walmart or Google – they are tame beasts compared with the ravaging territorial appetites of the militarized East India Company.
3. Answerable only to its shareholders and with no stake in the just governance of the region, or its long-term wellbeing, the East India Company’s rule quickly turned into the straightforward pillage of India, and the rapid transfer westwards of its wealth.
4. If history shows anything, it is that in the intimate dance between the power of the state and that of the corporation, while the latter can be regulated, it will use all the resources in its power to resist.

Explanatory Answer

Method of solving this CAT Question from Paragraph Completion:

The paragraph given argues that the story of the East India Company is still relevant to us. Despite the fact that there are no exact modern equivalents of the East India Company, the example set by it is a warning about the potential abuse of corporate power, relying on governments to bail out of trouble, by which the interests of the shareholders become those of the state.

Let us consider the options in order:

Option A- The East India Company's story is the first example of a nation state extracting, as its price for saving a failing corporation, the right to regulate and severely rein it in.

The paragraph given discusses the East India Company and its relevance in today’s context, especially with regard to large multinational companies and the power they wield over the governments.

Statement A does not conclude the given paragraph. It discusses a different line of thought, of how a government saving a company in crisis extracted from it, in turn, the right to regulate.

Option B- For all the power wielded today by the world’s largest corporations – whether ExxonMobil, Walmart or Google – they are tame beasts compared with the ravaging territorial appetites of the militarized East India Company.

Statement B states that the East India Company was far more powerful than the largest corporations of the world today.

This is not the right option to conclude the paragraph, which talks of the similarities between the corporations of today and the lessons to be learnt from the East India Company.

Option C- Answerable only to its shareholders and with no stake in the just governance of the region, or its long-term wellbeing, the East India Company’s rule quickly turned into the straightforward pillage of India, and the rapid transfer westwards of its wealth.

Statement C tells us how the East India Company quickly rose to power. However, it does not conclude or add to the given paragraph in terms of how and what its example teaches the corporations of today.

Option D- If history shows anything, it is that in the intimate dance between the power of the state and that of the corporation, while the latter can be regulated, it will use all the resources in its power to resist.

This statement is summarizes the relevance of the East India Company in the context of today’s corporations perfectly. This is hence the right option to conclude the paragraph.

The question is " Choose the Sentence that completes the Paragraph "

Hence, the answer is Sentence D

Choice D is the correct answer.