In the last two years, Kaiba Corporation, an electronics manufacturer

Question

Which of the following most logically completes the argument?

In the last two years, Kaiba Corporation, an electronics manufacturer, has laid off more than 20% of its workforce as its competitors cut into Kaiba's market share. A popular new line of products just released by Kaiba promises to increase profits and allow the company to expand into other markets. However, it would be premature to conclude that Kaiba's expansion will result in an increase in its workforce, because .

(A) the electronics industry is unlikely to undergo any major changes over the next several years.

(B) the company's success has largely been a result of relying on contractors instead of in-house employees for production and marketing.

(C) Kaibaís popular new product line was a joint venture with one of the company's competitors.

(D) most of the employees that Kaiba laid off in the last two years have moved on to other industries and would not seek employment at the company again.

(E) Kaiba considers that its current workforce is at least as productive on a per-employee basis as its workforce two years ago.

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ManifestDreamMBA · Answer

(A) the electronics industry is unlikely to undergo any major changes over the next several years.
 Irrelevant, we are concerned about Kaiba, industry changes are not a concern

(B) the company's success has largely been a result of relying on contractors instead of in-house employees for production and marketing.
 We are not concerned about how it reached the success. The contractors may continue or may not. That shouldn't impact workforce. Also it's unclear if contractors count towards workforce. The passage mentions workforce and not in-house employees

(C) Kaibaís popular new product line was a joint venture with one of the company's competitors.
 The expansion to other markets and increase in profits eliminates the probability to get shared workforce from competitors

(D) most of the employees that Kaiba laid o§ in the last two years have moved on to other industries and would not seek employment at the company again.
 Irrelevant. We don't need to assume they will hire ex-employees. The passage just mentions workforce expansion

(E) Kaiba considers that its current workforce is at least as productive on a per-employee basis as its workforce two years ago.
 If the current workforce is as productive/employee as it was couple of years back with reduced workforce, that suggests current workforce is pretty efficient and can may be handle the expansion in other markets

Whoisdmx15 · Answer

However, it would be premature to conclude that Kaiba's expansion will result in an increase in its workforce, because __________________________
(A) the electronics industry is unlikely to undergo any major changes over the next several years.  Eliminated  As in spite of no major changes, it may lead to increase in requirement of work force.

(B) the company's success has largely been a result of relying on contractors instead of in-house employees for production and marketing.  Eliminated  Employees may had been required for other business processes other than production and marketing.

(C) Kaibaís popular new product line was a joint venture with one of the company's competitors.  Eliminated  This could also require additional manpower as venturing into a new market may require both companies to hire additional manpower.

(D)  most of the employees that Kaiba laid o§ in the last two years have moved on to other industries and would not seek employment at the company again. Suitable  This option concludes that even if there is an increased demand for manpower, they may not come back having joined the competitors.

(E) Kaiba considers that its current workforce is at least as productive on a per-employee basis as its workforce two years ago.  Eliminated  Even if workforce has same productivity as some past time, new expansion may still require additional manpower.

hr1212 · Answer

Kaiba Corp => Workforce reduction

New line of products => Profit increase and expansion

Won't lead to Kaiba's workforce increase, why?

So we need some reason which explains that Kaiba can expand and increase profits without needing to hire new employees

Pre-Thinking
 
 Current employees aren't yet utilized at full efficiency and they themselves can handle all the growth pressure which might come out of this new line of products 
 Kaiba is outsourcing it's work, so it doesn't need it's own employees for this new expansion

(A) the electronics industry is unlikely to undergo any major changes over the next several years. -  No effect on the given argument

(B) the company's success has largely been a result of relying on contractors instead of in-house employees for production and marketing. -  This seems like a good contender, if Kaiba is getting lot of things done via contractors then it doesn't need to hire in-house employees for the new line of products. Although this choice is explicitly mentioning just production and marketing departments and ignoring other departments, it's the only one which gives some solid reason on why Kaiba wouldn't need to hire new employees to expand it's new line of products.

(C) Kaibaís popular new product line was a joint venture with one of the company's competitors. -  Even if it's a joint venture, growth can still require Kaiba to hire more employees to increase profits and reduce dependency on the competitor's company.

(D) most of the employees that Kaiba laid o§ in the last two years have moved on to other industries and would not seek employment at the company again.  Even if old employees don't want to rejoin, Kaiba can still hire new employees to boost up profits which can lead to increase in overall workforce

(E) Kaiba considers that its current workforce is at least as productive on a per-employee basis as its workforce two years ago.  This is an interesting choice, it talks about productivity of current employees vs old ones, but the catch here seems that it's talking about productivity on per-employee basis. If it had something related to overall productivity, like current overall productivity is atleast as much as the one 2 years back then this would have been a strong contender. But this choice just focuses on employee level productivity which hasn't been impacted by reduction but still to increase overall productivity, Kaiba might still need to hire more employees.

IMO: B

ManifestDreamMBA · Answer

Hi experts, Can you please advise on this question? I have shared my understanding of the answer choices but didn't get a strong reasoning why B is the correct answer. There seems to be some assumptions before we can pick B as the answer - like contractors are not part of workforce, contractors helped in achieving what Kaiba has now but it doesn't mean they will be required in the future too, etc . Please help

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Sowmya_10 · Answer

Yes , I agree with the same thinking strategy , Hence feel answer choice E should be the correct answer choice .

glagad · Answer

In E, it talks about productivity/employee - i.e. average productivity hasn't changed.

This doesn't tell us whether more workforce is required or not when more work comes in due to the new product line.

I would reject E for the same.

Bunuel · Answer

OFFICIAL EXPLANATION

B

To logically complete the passage, we need a reason why Kaiba's expansion wouldn't include an increase in their workforce. We know that decreasing market share led to a decrease in the workforce, so there must be some outside factor that is affecting the usual correlation between the size of the company and the
number of workers needed.

Choice (A) is incorrect, as it doesn't give us any change at all, let alone any details that apply directly to Kaiba's situation. Choice (B) tells us something new about Kaiba (their reliance on contractors) that suggests they don't need employees of their own. If they can grow without new employees, and it has had a positive effect on their business, it makes sense that they wouldn't hire new employees as they expand. This looks like a solid choice.

Choice (C) is irrelevant, as it doesn't address employment figures at all. (D) is also irrelevant. We aren't concerned with the specific employees that Kaiba
laid of in the past; we care about Kaiba's employment numbers. (E) is on the right track, but if the current workforce is only "at least as productive" as it was before, it would seem to need more employees as it grows. If the current workforce were substantially more productive, they might not need more workers, but we don't know if that's the case. (B) is the correct choice.

saugata64 · Answer

Option B says that the company's success has largely been a result of relying on contractors, meaning that the company relied on the contractors in the past for success. Does this hold true for the future?
However E says that its current workforce is at least as productive, meaning that workforce can be more productive but not less. According to my analysis Option E should be the correct one. Please correct me.

RISHIKAPAUL · Answer

B is the answer without any doubt.
(Key tip for CR: a) look for key words; b) eliminate the unnecessary ones; c) whenever stuck between two options, read slowly again and choose according to your instinct)
Hope this helps. :")

Aditi81 · Answer

I feel that is too far of an assumption because you just can't possibly ever conclude this and besides the passage should be completed with a paragraph that is giving information from company's end.

Carcass · Answer

Comparing B and E
- Option B: Focuses on outsourcing (contractors). This is a valid reason, but the argument doesn't mention outsourcing previously.
- Option E: Focuses on productivity gains (same output with fewer workers). This directly aligns with the layoffs and suggests efficiency improvements could handle expansion.

Option E is more tightly connected to the given information (layoffs + productivity) and doesn't introduce new assumptions (like outsourcing).

Why E is Best
The argument implies Kaiba can expand without increasing workforce size. The most direct explanation is that the current workforce is now more productive (per employee) than before, so growth doesn't require more hires.

Final Answer
E. Kaiba considers that its current workforce is at least as productive on a per-employee basis as its workforce two years ago.

For me  E is better than B

In the last two years, Kaiba Corporation, an electronics manufacturer

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GMAT Critical Reasoning (CR) Questions

In the last two years, Kaiba Corporation, an electronics manufacturer

Prep Toolkit

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