Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Jun 0808:00 PM EDT
-10:00 PM EDT
A powerful GMAT course taught live online + 6 months of access to TTP OnDemand GMAT Masterclass included! Mon/Wed June 8, 2026 →August 12, 2026 8:00pm-10:00pm EST
Jun 1006:00 AM PDT
-06:15 PM PDT
Register for the GMAT Club Virtual MBA Spotlight Fair – the world’s premier event for serious MBA candidates. This is your chance to hear directly from Admissions Directors at nearly every Top 30 MBA program..
Jun 1111:00 AM EDT
-01:00 PM EDT
TTP GMAT OnDemand gives serious students 400+ hours of expert video instruction, the full TTP course, AI support, weekly office hours, and a 715+ score guarantee—all built for elite GMAT score improvement.
02 Jun 2026, 17:16
Kudos
Bookmarks
Established manufacturers face a tension between exploiting their existing capabilities, in service of short-term profits, exploring new opportunities with an eye to long-term viability. Exploitation goals include constructive dialogue with existing clients, together with the at-scale improvement of products and manufacturing techniques that the dialogue informs. Exploration includes experimental refinement, or creation from scratch, of product prototypes and manufacturing processes, as well as preparatory analysis of and outreach into potential new markets.
Exploration and exploitation ultimately must compete for a firm’s managerial and capital resources. Maldonado showed that firms allocating too many resources to exploitation, while nearly always exceptionally productive and cost-efficient in the immediate term, face high probabilities of insolvency as markets evolve. Conversely, De La Cruz showed that excess allocation in the opposite direction causes firms to accumulate more provisional technologies than they can possibly commercialize, and therefore to spread research and development resources far too thinly across those technologies, while also struggling to meet absolute minimum production figures. Executives must guide their companies to the optimal balance in between.
Some manufacturers have chartered functionally separate, largely autonomous company divisions known as “skunkworks” to address exploration goals. These operate at a remove from short-term market fluctuations and their unpredictable-yet-always-urgent pressures on main production floors, so that their small teams can maintain the sharp collective focus that skunkworks were conceived to promote. Critics, however, claim that innovations from a sequestered unit cannot produce returns until they and their underlying knowledge base are integrated into the company’s mainstream operations, and that only then will both sides of the attempted knowledge transfer discover just how many significant communication, skill and culture gaps have opened up across the scrupulously maintained distance between the skunkworks and the main floor, rendering the integration process anywhere from tedious and exasperating at best, to actually impossible at worst,
In a second, newer approach to this overall question of balance, known as employee ambidexterity, individual employees choose independently how to allocate their time between exploitative and exploratory tasks. Proponents contend that this model fosters a culture of continuous innovation while preserving the unity and camaraderie of the corporation as a whole. Skeptics counter that without institutional buffers, short-term performance pressures will consistently crowd out exploratory activity, leaving the company’s long-term adaptive capacity to languish.
Which of the following considerations, if true, most strongly argues FOR the implementation of exactly one of skunkworks or employee ambidexterity and AGAINST the implementation of the other?
A. An exploration project is eight times more likely to produce profitable innovations if everyone working on that project has at least one year’s work experience at exploiting the company’s current capabilities.
B. An exploration project is likely to produce eventual value only if the employees assigned to the project consistently work together in close collaboration.
C. Employees who are assigned to exploration projects stay with their current employer for an average of nine years longer than employees whose work functions solely to exploit existing capabilities.
D. Employees who work full-time on exploitation often grow to resent what they perceive as the greater freedom or special status of other employees working on exploration projects in the same facility.
E. Exploration projects are almost three times as likely to succeed when the workers have a hand in setting their work schedule than when they do not.
Exploration and exploitation ultimately must compete for a firm’s managerial and capital resources. Maldonado showed that firms allocating too many resources to exploitation, while nearly always exceptionally productive and cost-efficient in the immediate term, face high probabilities of insolvency as markets evolve. Conversely, De La Cruz showed that excess allocation in the opposite direction causes firms to accumulate more provisional technologies than they can possibly commercialize, and therefore to spread research and development resources far too thinly across those technologies, while also struggling to meet absolute minimum production figures. Executives must guide their companies to the optimal balance in between.
Some manufacturers have chartered functionally separate, largely autonomous company divisions known as “skunkworks” to address exploration goals. These operate at a remove from short-term market fluctuations and their unpredictable-yet-always-urgent pressures on main production floors, so that their small teams can maintain the sharp collective focus that skunkworks were conceived to promote. Critics, however, claim that innovations from a sequestered unit cannot produce returns until they and their underlying knowledge base are integrated into the company’s mainstream operations, and that only then will both sides of the attempted knowledge transfer discover just how many significant communication, skill and culture gaps have opened up across the scrupulously maintained distance between the skunkworks and the main floor, rendering the integration process anywhere from tedious and exasperating at best, to actually impossible at worst,
In a second, newer approach to this overall question of balance, known as employee ambidexterity, individual employees choose independently how to allocate their time between exploitative and exploratory tasks. Proponents contend that this model fosters a culture of continuous innovation while preserving the unity and camaraderie of the corporation as a whole. Skeptics counter that without institutional buffers, short-term performance pressures will consistently crowd out exploratory activity, leaving the company’s long-term adaptive capacity to languish.
Which of the following considerations, if true, most strongly argues FOR the implementation of exactly one of skunkworks or employee ambidexterity and AGAINST the implementation of the other?
A. An exploration project is eight times more likely to produce profitable innovations if everyone working on that project has at least one year’s work experience at exploiting the company’s current capabilities.
B. An exploration project is likely to produce eventual value only if the employees assigned to the project consistently work together in close collaboration.
C. Employees who are assigned to exploration projects stay with their current employer for an average of nine years longer than employees whose work functions solely to exploit existing capabilities.
D. Employees who work full-time on exploitation often grow to resent what they perceive as the greater freedom or special status of other employees working on exploration projects in the same facility.
E. Exploration projects are almost three times as likely to succeed when the workers have a hand in setting their work schedule than when they do not.
02 Jun 2026, 17:16
Kudos
Bookmarks
Official Solution:
Established manufacturers face a tension between exploiting their existing capabilities, in service of short-term profits, exploring new opportunities with an eye to long-term viability. Exploitation goals include constructive dialogue with existing clients, together with the at-scale improvement of products and manufacturing techniques that the dialogue informs. Exploration includes experimental refinement, or creation from scratch, of product prototypes and manufacturing processes, as well as preparatory analysis of and outreach into potential new markets.
Exploration and exploitation ultimately must compete for a firm’s managerial and capital resources. Maldonado showed that firms allocating too many resources to exploitation, while nearly always exceptionally productive and cost-efficient in the immediate term, face high probabilities of insolvency as markets evolve. Conversely, De La Cruz showed that excess allocation in the opposite direction causes firms to accumulate more provisional technologies than they can possibly commercialize, and therefore to spread research and development resources far too thinly across those technologies, while also struggling to meet absolute minimum production figures. Executives must guide their companies to the optimal balance in between.
Some manufacturers have chartered functionally separate, largely autonomous company divisions known as “skunkworks” to address exploration goals. These operate at a remove from short-term market fluctuations and their unpredictable-yet-always-urgent pressures on main production floors, so that their small teams can maintain the sharp collective focus that skunkworks were conceived to promote. Critics, however, claim that innovations from a sequestered unit cannot produce returns until they and their underlying knowledge base are integrated into the company’s mainstream operations, and that only then will both sides of the attempted knowledge transfer discover just how many significant communication, skill and culture gaps have opened up across the scrupulously maintained distance between the skunkworks and the main floor, rendering the integration process anywhere from tedious and exasperating at best, to actually impossible at worst,
In a second, newer approach to this overall question of balance, known as employee ambidexterity, individual employees choose independently how to allocate their time between exploitative and exploratory tasks. Proponents contend that this model fosters a culture of continuous innovation while preserving the unity and camaraderie of the corporation as a whole. Skeptics counter that without institutional buffers, short-term performance pressures will consistently crowd out exploratory activity, leaving the company’s long-term adaptive capacity to languish.
Which of the following considerations, if true, most strongly argues FOR the implementation of exactly one of skunkworks or employee ambidexterity and AGAINST the implementation of the other?
A. An exploration project is eight times more likely to produce profitable innovations if everyone working on that project has at least one year’s work experience at exploiting the company’s current capabilities.
B. An exploration project is likely to produce eventual value only if the employees assigned to the project consistently work together in close collaboration.
C. Employees who are assigned to exploration projects stay with their current employer for an average of nine years longer than employees whose work functions solely to exploit existing capabilities.
D. Employees who work full-time on exploitation often grow to resent what they perceive as the greater freedom or special status of other employees working on exploration projects in the same facility.
E. Exploration projects are almost three times as likely to succeed when the workers have a hand in setting their work schedule than when they do not.
This problem, like most GMAT problems with an unusually large number of words in the question prompt itself, requires little beyond reading and following the directions carefully and literally.
In this case, we want a choice that ALIGNS WITH the basic structure and/or purpose of EITHER skunk-works OR employee ambidexterity, but CONFLICTS with the structure and/or purpose of the other paradigm.
Let’s review these basic features and goals:
WHAT IS a skunk-works? and WHY?:
• Separate, autonomous subdivision of larger co.
• Focused on exploration
• Small team works together on specialized projects
WHAT IS employee ambidexterity? and WHY?:
• Each employee individually decides when to work on exploration vs. exploitation tasks
• Promotes positive cohesion / camaraderie
For brevity, the following key will address both of these sets of points together for each answer choice. When you are solving this problem, on the other hand, you should strictly use the criteria for ONE paradigm at a time, for the simple reason that it’s more efficient, you eliminate as many choices as you can using just half the information, before trying to do any juggling of both halves.
Here is how each answer choice stacks up against the above sets of criteria.
Option A: Employees’ aggregate work experience on exploitation tasks has no bearing on any of the considerations above, either for or against either paradigm, so this choice is irrelevant overall and can be eliminated.
Option B: One of the fundamental features of the skunk-works paradigm is that the employees on a skunk-works project “maintain a sharp collective focus”, in other words, that they work in ongoing close collaboration as a team, so this choice argues concretely in favor of the skunk-works paradigm. By contrast, the complete freedom of scheduling given separately to each employee under employee ambidexterity is fundamentally incompatible with ongoing close teamwork (which cannot happen unless the team members all work on roughly identical schedules), so this choice forms a blisteringly strong attack on the employee-ambidexterity paradigm, effectively guaranteeing that nothing of any eventual value to the company will ever be produced under that paradigm.
This choice therefore argues, simultaneously, for skunk-works and against employee ambidexterity, so it’s the correct answer.
Option C: The length of time that employees spend overall with one employer before leaving or retiring, a longer-term outcome, cannot possibly be a factor in whether that employer sets up a skunk-works or a division with employee ambidexterity in the short run. (More generally, the decisions you make today do not, and cannot, depend on anything that won’t be finalized until tomorrow.) So this choice, like option A, argues neither for nor against either of the two paradigms.
Option D: The clearest connections to the two paradigms here is “special status ... of employees working on exploration projects” and “greater freedom ... of employees working on exploration projects”, which correspond fairly closely to the structural definitions of skunk-works and employee ambidexterity respectively. According to this choice, IF a either a skunk-works or a division of employees who’ve been granted employee ambidexterity happens to be housed in the same physical building (“same facility”) as mainstream divisions, and IF the employees in those mainstream divisions happen to be working 100% on exploitation (and 0% on exploration), then the setup will negatively effect the job satisfaction of the exploitation workers as well as the overall cohesion of the company as a whole. In other words, IF the above logistical facts are true, then this choice weighs against setting up the skunk-works and/or ambidextrous division in those specific ways.
There are two fundamental problems here. First, the statements in this choice don’t have any definite bearing on either special paradigm unless the highly specific “IF” clauses above are true, and we’re not given any clear evidence that those clauses are, in fact, true. Second, more fundamentally, this choice contains possible factors AGAINST BOTH paradigms, which is not what the problem asks for (we want factors that weigh against one paradigm but IN FAVOR of the other one).
Option E: This choice clearly argues in favor of the employee-ambidexterity paradigm, which very clearly satisfies the description of “giving employees a hand in their scheduling”. (In fact, the ‘ambidextrous’ employees are given complete individual control over their scheduling, not merely “a hand in” it.) On the other hand, the passage tells us nothing about whether skunk-works employees are given any input into their work schedules, so we have no way to determine whether this choice has any relevance to the skunk-works paradigm.
Answer: B
Established manufacturers face a tension between exploiting their existing capabilities, in service of short-term profits, exploring new opportunities with an eye to long-term viability. Exploitation goals include constructive dialogue with existing clients, together with the at-scale improvement of products and manufacturing techniques that the dialogue informs. Exploration includes experimental refinement, or creation from scratch, of product prototypes and manufacturing processes, as well as preparatory analysis of and outreach into potential new markets.
Exploration and exploitation ultimately must compete for a firm’s managerial and capital resources. Maldonado showed that firms allocating too many resources to exploitation, while nearly always exceptionally productive and cost-efficient in the immediate term, face high probabilities of insolvency as markets evolve. Conversely, De La Cruz showed that excess allocation in the opposite direction causes firms to accumulate more provisional technologies than they can possibly commercialize, and therefore to spread research and development resources far too thinly across those technologies, while also struggling to meet absolute minimum production figures. Executives must guide their companies to the optimal balance in between.
Some manufacturers have chartered functionally separate, largely autonomous company divisions known as “skunkworks” to address exploration goals. These operate at a remove from short-term market fluctuations and their unpredictable-yet-always-urgent pressures on main production floors, so that their small teams can maintain the sharp collective focus that skunkworks were conceived to promote. Critics, however, claim that innovations from a sequestered unit cannot produce returns until they and their underlying knowledge base are integrated into the company’s mainstream operations, and that only then will both sides of the attempted knowledge transfer discover just how many significant communication, skill and culture gaps have opened up across the scrupulously maintained distance between the skunkworks and the main floor, rendering the integration process anywhere from tedious and exasperating at best, to actually impossible at worst,
In a second, newer approach to this overall question of balance, known as employee ambidexterity, individual employees choose independently how to allocate their time between exploitative and exploratory tasks. Proponents contend that this model fosters a culture of continuous innovation while preserving the unity and camaraderie of the corporation as a whole. Skeptics counter that without institutional buffers, short-term performance pressures will consistently crowd out exploratory activity, leaving the company’s long-term adaptive capacity to languish.
Which of the following considerations, if true, most strongly argues FOR the implementation of exactly one of skunkworks or employee ambidexterity and AGAINST the implementation of the other?
A. An exploration project is eight times more likely to produce profitable innovations if everyone working on that project has at least one year’s work experience at exploiting the company’s current capabilities.
B. An exploration project is likely to produce eventual value only if the employees assigned to the project consistently work together in close collaboration.
C. Employees who are assigned to exploration projects stay with their current employer for an average of nine years longer than employees whose work functions solely to exploit existing capabilities.
D. Employees who work full-time on exploitation often grow to resent what they perceive as the greater freedom or special status of other employees working on exploration projects in the same facility.
E. Exploration projects are almost three times as likely to succeed when the workers have a hand in setting their work schedule than when they do not.
This problem, like most GMAT problems with an unusually large number of words in the question prompt itself, requires little beyond reading and following the directions carefully and literally.
In this case, we want a choice that ALIGNS WITH the basic structure and/or purpose of EITHER skunk-works OR employee ambidexterity, but CONFLICTS with the structure and/or purpose of the other paradigm.
Let’s review these basic features and goals:
WHAT IS a skunk-works? and WHY?:
• Separate, autonomous subdivision of larger co.
• Focused on exploration
• Small team works together on specialized projects
WHAT IS employee ambidexterity? and WHY?:
• Each employee individually decides when to work on exploration vs. exploitation tasks
• Promotes positive cohesion / camaraderie
For brevity, the following key will address both of these sets of points together for each answer choice. When you are solving this problem, on the other hand, you should strictly use the criteria for ONE paradigm at a time, for the simple reason that it’s more efficient, you eliminate as many choices as you can using just half the information, before trying to do any juggling of both halves.
Here is how each answer choice stacks up against the above sets of criteria.
Option A: Employees’ aggregate work experience on exploitation tasks has no bearing on any of the considerations above, either for or against either paradigm, so this choice is irrelevant overall and can be eliminated.
Option B: One of the fundamental features of the skunk-works paradigm is that the employees on a skunk-works project “maintain a sharp collective focus”, in other words, that they work in ongoing close collaboration as a team, so this choice argues concretely in favor of the skunk-works paradigm. By contrast, the complete freedom of scheduling given separately to each employee under employee ambidexterity is fundamentally incompatible with ongoing close teamwork (which cannot happen unless the team members all work on roughly identical schedules), so this choice forms a blisteringly strong attack on the employee-ambidexterity paradigm, effectively guaranteeing that nothing of any eventual value to the company will ever be produced under that paradigm.
This choice therefore argues, simultaneously, for skunk-works and against employee ambidexterity, so it’s the correct answer.
Option C: The length of time that employees spend overall with one employer before leaving or retiring, a longer-term outcome, cannot possibly be a factor in whether that employer sets up a skunk-works or a division with employee ambidexterity in the short run. (More generally, the decisions you make today do not, and cannot, depend on anything that won’t be finalized until tomorrow.) So this choice, like option A, argues neither for nor against either of the two paradigms.
Option D: The clearest connections to the two paradigms here is “special status ... of employees working on exploration projects” and “greater freedom ... of employees working on exploration projects”, which correspond fairly closely to the structural definitions of skunk-works and employee ambidexterity respectively. According to this choice, IF a either a skunk-works or a division of employees who’ve been granted employee ambidexterity happens to be housed in the same physical building (“same facility”) as mainstream divisions, and IF the employees in those mainstream divisions happen to be working 100% on exploitation (and 0% on exploration), then the setup will negatively effect the job satisfaction of the exploitation workers as well as the overall cohesion of the company as a whole. In other words, IF the above logistical facts are true, then this choice weighs against setting up the skunk-works and/or ambidextrous division in those specific ways.
There are two fundamental problems here. First, the statements in this choice don’t have any definite bearing on either special paradigm unless the highly specific “IF” clauses above are true, and we’re not given any clear evidence that those clauses are, in fact, true. Second, more fundamentally, this choice contains possible factors AGAINST BOTH paradigms, which is not what the problem asks for (we want factors that weigh against one paradigm but IN FAVOR of the other one).
Option E: This choice clearly argues in favor of the employee-ambidexterity paradigm, which very clearly satisfies the description of “giving employees a hand in their scheduling”. (In fact, the ‘ambidextrous’ employees are given complete individual control over their scheduling, not merely “a hand in” it.) On the other hand, the passage tells us nothing about whether skunk-works employees are given any input into their work schedules, so we have no way to determine whether this choice has any relevance to the skunk-works paradigm.
Answer: B
