In this question, a statement is followed by two courses of action, numbered I…
2025
In this question, a statement is followed by two courses of action, numbered I and II. You must assume everything in the statement to be true and, on the basis of the information given in the statement, decide which of the courses of action logically follow(s).
Statement: Company A conclusively found that there is a severe dysfunction in one of the components used in their smartphones, which can cause the phone to suddenly swell up or catch fire.
Courses of Action: (I) Company A should keep the findings about such dysfunctional components confidential, as it affects the company's stock price. (II) Company A should immediately recall the defective batch and adequately compensate its customers.
Answer: D. Only II follows — Concept: In a statement and course of action item, a suggested step follows only when it is practical, ethical and aimed directly at the problem the statement…
- A.
Neither I nor II follows
- B.
Only I follows
- C.
Both I and II follow
- D.
Only II follows
Show answer & explanation
Correct answer: D
Concept: In a statement and course of action item, a suggested step follows only when it is practical, ethical and aimed directly at the problem the statement describes. A step whose purpose is to protect the decision maker's own interest — image, revenue or share price — while the stated harm continues does not follow. A step that removes the stated harm and repairs the damage it has caused does follow.
Application: the statement fixes three facts — the dysfunction is conclusively established, it is severe, and it can make a smartphone built with that component suddenly swell or catch fire. So every unit carrying the faulty component is a live safety risk to whoever ends up using it, and each suggested step must be judged against that risk.
Course of Action I asks the company to keep the finding confidential because disclosure would move the share price. This protects the company's market valuation, not the user: the defective handsets stay in the market, so the hazard the statement describes is left entirely untouched, and concealing a known safety defect exposes the company to far larger legal and reputational damage later. It is therefore not a step that follows from the statement.
Course of Action II asks the company to recall the defective batch immediately and compensate its customers. The recall withdraws the hazardous units from circulation before the risk the statement establishes can materialise, and the compensation answers for the defective, unsafe handsets the company has supplied. It is practical, immediate and entirely within the company's power, so it is a step that follows.
Cross-check: apply the standard test — does the step end the problem stated? Concealment leaves the hazard live and adds liability, while recall with compensation ends it. Hence only Course of Action II follows, and the answer is “Only II follows”.