PrepTest 109, Section 4, Question 8
Early in the development of a new product(58 more words not shown)
Which one of the following,(7 more words not shown)
- AOn average, new(18 more words not shown)
- BFor most established(17 more words not shown)
- CThe more talented(22 more words not shown)
- DThe current revenue(19 more words not shown)
- EEarly short-term revenue(20 more words not shown)
Reading the argument
The new project needs the best managers. What happens to the established product when we take those managers away?
I can see the author's concern. A new product may need a great deal of managerial skill before it brings in much money. Assigning the talented people only to products that already earn a lot could leave new ventures without the help they need to get started.
But those managers are already doing something. Perhaps keeping a successful product running is just as demanding as launching a new one. If moving them saves the new venture but damages an important existing product, the recommendation needs more support.
What we’re looking for
For the strengthening question, I'd want reassurance about that tradeoff. Maybe launching a product requires unusual talent, while maintaining it afterward is easier. If the established product can keep its revenue and profits after the best managers move, we have a stronger reason to reassign them.
Working the answers
- A
Executive rank isn't the same as managerial talent. Even if we treated it as a useful comparison, equal survival times wouldn't show a benefit from assigning the best managers to new ventures. This doesn't establish that the proposed reassignment would help or that established products could manage without those people.
- B
A small share of spending doesn't tell us where the best managers are needed. A new product could cost little to develop yet still require exceptional judgment. Or it could be a minor project that doesn't warrant moving anyone. The expenditure comparison doesn't answer the staffing tradeoff.
- C
This gives talented managers a reason to resist the proposed assignment, rather than a reason the company should make it. Lack of interest doesn't prove they couldn't do the work, but it doesn't strengthen the case for moving them either. We still don't know whether the established product can afford to lose their attention.
- DCorrect
This directly answers our concern about the managers' current work. The established product can maintain its revenue and profitability even with the best managers elsewhere.
The author has already given us a reason new ventures need that talent. D reduces the competing concern that moving it will sacrifice the company's existing success. It doesn't guarantee that every new project will succeed; it makes the proposed allocation of managers more attractive.
- E
This concerns how well early revenue prospects predict eventual success. It doesn't tell us whether moving talented managers is a good way to improve those prospects or whether their existing products would suffer. A useful forecast isn't itself a reason to adopt this staffing policy.
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