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The year after a company whose success depends on product innovation

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The year after a company whose success depends on product innovation  [#permalink]

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New post 26 Aug 2019, 23:19
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17% (02:35) correct 83% (02:24) wrong based on 181 sessions

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Competition Mode Question



The year after a company whose success depends on product innovation has a profitable year, it invests more cash in its research and development department to attempt to generate innovations that can ensure future success. Therefore, companies whose success depends on product innovation should generate more innovations during the years following profitable years of business than during years following unprofitable years of business.

Which of the following, if true about a company whose success depends on product innovation during the year after a profitable year, casts the most serious doubt on the conclusion drawn above?

A. Its employees ask for higher wages than they do at other times.

B. Its management participates more in research and development and makes process alterations.

C. Its research and development team members propose more project ideas that the company does not have time to act on than usual.

D. Its management increases monetary team rewards for successful innovation.

E. Its innovations increase in quantity, but have a higher rate of failure when applied to the market.

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Re: The year after a company whose success depends on product innovation  [#permalink]

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New post 27 Aug 2019, 06:19
The conclusion is that they should generate more innovations during the years following profitable years.

E. Its innovations increase in quantity, but have a higher rate of failure when applied to the market.

E is the answer because it says that there will be a higher rate of failure if they do so. Hence it would not be a good option.

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Re: The year after a company whose success depends on product innovation  [#permalink]

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New post 27 Aug 2019, 12:40
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IMO E :
Premise: If year is successful, invest in more innovation ;
if year is unsuccessful, don't invest in more innovation following year.

Means something would have gone wrong some year which would have brought down success if they reply on innovation. Why management should be discouraged for innovation. It might be that all innovations are not bringing fruits and just adding to cost of R&D : Any point which can lead to increase r&D expenditure or unnecesary innovation can be our answer.

A. Its employees ask for higher wages than they do at other times. : Out of scope: Incorrect

B. Its management participates more in research and development and makes process alterations. : Out of scope: Incorrect

C. Its research and development team members propose more project ideas that the company does not have time to act on than usual. : If they propose more ideas, we don't know if that ideas are good or not. If company is not acting on all but acting on some it doesn't cast doubt on conclusion that unsuccessful year they should not do.

D. Its management increases monetary team rewards for successful innovation. : Incorrect

E. Its innovations increase in quantity, but have a higher rate of failure when applied to the market. : Correct : If innovations are just done for sake of innovation and results are not yielded, its a waste of resource, leading to unsuccessful year, which cast doubt that they should work on quality innovation only, and not quantity.
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Re: The year after a company whose success depends on product innovation  [#permalink]

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New post 27 Aug 2019, 13:05
The conclusion is that companies whose success depends on product innovation should generate more innovations during the years following the profitable years of business.

The correct answer choice most weakens on this conclusion.

A is not correct because employees merely asking for wages during such times does not mean that new successful innovations will not come out during the period.

B strengthens the conclusion because management's participation in R&D will rather increase the chances of coming out with successful innovations within the years.

C does not weaken the conclusion instead it strengthens it. It says that the company's R&D team come out with more ideas that the company is able to have time to act on. If the company has a sound way of serving the best ideas out of the lot, it should be fine in the circumstances.

D is also incorrect because increased monetary rewards for teams may motivate them to work harder to come out with an innovation that will be successful.

E is correct. If there are increased innovations but the rate of failure is high, then it's probably not the best time to embark on a drive to come out with an new innovation. This clearly weakens the conclusion drawn the most out of the lot.

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Re: The year after a company whose success depends on product innovation  [#permalink]

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New post 27 Aug 2019, 19:36
IMO C ...

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Re: The year after a company whose success depends on product innovation  [#permalink]

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New post 28 Aug 2019, 02:04
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Bunuel wrote:

Competition Mode Question



The year after a company whose success depends on product innovation has a profitable year, it invests more cash in its research and development department to attempt to generate innovations that can ensure future success. Therefore, companies whose success depends on product innovation should generate more innovations during the years following profitable years of business than during years following unprofitable years of business.

Which of the following, if true about a company whose success depends on product innovation during the year after a profitable year, casts the most serious doubt on the conclusion drawn above?

A. Its employees ask for higher wages than they do at other times.

B. Its management participates more in research and development and makes process alterations.

C. Its research and development team members propose more project ideas that the company does not have time to act on than usual.

D. Its management increases monetary team rewards for successful innovation.

E. Its innovations increase in quantity, but have a higher rate of failure when applied to the market.


Official Explanation



Reading the question: The first sentence is a fact and the second provides an opinion. We have another pseudo-syllogistic argument, so we can parse it by term matching:

Image

The kinds of companies and the timing of the actions in question both match up well. The mismatch is in the last row, especially between the verbs "invest" and "generate." Even if it's a fact that they invest in R&D the year after a good year, does that mean that they should generate more innovations the year after a good year? Maybe not; maybe the results are not so accurately timed, and/or occur after a delay. That's our weakener.

Applying the filter: our filter does not show up exactly as expected. But we're looking for yes on the investing and no on the generating, a failure to generate. Choices (A), (C), and (E) all sound negative, but don't necessarily impede the company's ability to generate the innovations. We're left with (B) and (D). (D), if anything, might help generating innovations. Choices (B) could be helpful or harmful, but it's the only one left. And if the "processes" have been "altered," they could be worse.

The correct answer is (B).

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The year after a company whose success depends on product innovation  [#permalink]

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New post 06 Sep 2019, 19:50
As far as I understand the argument more cash on hand should lead to more innovations. In no way is the cash required to go research and development. In this instance D seems better than B. In B, the managers seem to take a greater a greater interest in R and D and therefore it seems likely that any additional cash will be reinvested. As you said in the OA altered processes could be bad, but if the company is successful, why would we assume bad? In D there is a surefire reason that the cash on hand isn't going to R and D to develop more innovations. It seems more logical given the premise, but it is a challenging question.
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The year after a company whose success depends on product innovation   [#permalink] 06 Sep 2019, 19:50
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