Logical Reasoning

PT109 · S4 · Q8 Early in the development of a new

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Early in the development of a new product line, the critical resource is talent.

Conclusion (should = opinion)

The best managers in a company should be assigned to development projects.

Evidence

Early in a new product's development, the critical resource is talent. New marketing requires managerial skill in disproportionate amounts, relative to short-term revenue prospects.

But talented managers are usually assigned only to established high-revenue product lines, and so most new marketing ventures fail.

Evaluate

Since this conclusion consists of a Plan / Recommendation, we should think about the Net Gain / Net Loss aspects of comparing our current world to the world the author is suggesting.

In particular, we consider ideas like - feasibility - motives / incentives - the possibility of the plan backfiring

Will companies be better off if they switch their best managers from overseeing established high-revenue product lines to overseeing new product lines that won't make as much revenue in the short term?

If we were objecting to this plan, what might we say?

- Don't worry about new product lines. Most of them fail anyway, regardless of the talent of the manager.

- We need to safeguard the sweet revenue we get from established products. If we take the best managers off those product lines, then we won't make as much money off them as we would have otherwise.

- We make more money by making sure that established lines keep raking in the revenue, than we do by trying to launch new product lines.

Goal

Since we're strengthening the argument, our answer might go in the opposite direction from one of our objections:

- The new product lines are not likely to fail, if they are given a great manager.

- You don't need the manager to oversee existing product lines. Even mediocre managers can keep the money rolling in from those.

- There's more money to be made long term by trying to launch as many product lines as we viably can, rather than trying to milk as much revenue out of established product lines.

8.

Which one of the following, if true, most strengthens the author's argument?

  1. On average, new ventures under

    Weakens

    This makes it sound like it could be a waste to put our best managers on new ventures. New ventures have the same likelihood of surviving whether they're headed by executive level managers or lower-ranking managers.

    4% picked this

  2. For most established companies, the

    No Impact

    We want new product lines to sound like a very juicy source of potential revenue, in order to strengthen the suggestion that we should allocate our most talented managers to trying to launch those new product lines. This is just saying that most companies don't spend a large share on developing new product lines. That fact doesn't really support or oppose the idea of allocating our best managers to new product lines. If anything, it seems to diminish the economic scale of the new product lines, and the smaller in scale they are, the less likely we would be to "waste" our best managers on those projects.

    3% picked this

  3. The more talented a manager

    Weakens

    This goes against the Plan by talking about motives / incentives. It sounds like this plan would not have the cooperation of the best managers, because they are the ones with the least interest in developing a new product line.

    5% picked this

  4. Correct

    The current revenue and profitability

    Why this is right

    This Rules Out an Objection we made. We were worried about transferring our best managers off of our cash cows (our established high-revenue product lines). After all, it's not worth gambling on trying to launch a new product line (with a rockstar manager) if it's going to imperil an established source of high-revenue. Luckily, though, as this answer tells us, we have nothing to worry about. We can safely move the best managers over the new products and not worry about messing up the established products, because the current revenue and profitability can be sustained even without those managers. This answer basically works by Ruling Out a way in which the plan could backfire (it would backfire if we had our top managers helping new products to get off the ground, while our best products started slumping now that they weren't being so expertly managed).

    Skill tested: Strengthen · how this choice captures the argument's function is the move to repeat next time.

    71% picked this

  5. Early short-term revenue prospects of

    Weakens, if anything

    The new projects that we're thinking of assigning our best managers to have relatively small short-term revenue prospects. We would want to hear that even though a new project has only small revenue in the short term, if it's successfully launched it could one day be very lucrative. This says the opposite. The early prospects are a good predictor of the long-term prospects.

    16% picked this

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