GMAT : Analysis of An Argument

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An Argument

61. The following appeared as part of a recommendation by one of the directors of the Beta Company.

The Alpha Company has just reduced its workforce by laying off fifteen percent of its employees in all divisions and at all levels and it is encouraging early retirement for other employees. As you know, the Beta Company manufacturers some products similar to Alpha's, but our profits have fallen over the last few years. To improve Beta's competitive position, we should try to hire a significant number of Alpha's former workers, since these experienced workers can provide valuable information about Alpha's successful methods, will require little training and will be particularly motivated to compete against Alpha.


Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underline the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound and what, if anything, would help you better evaluate in conclusion.


A director of Beta Company suggests that Beta can improve its competitive position by hiring a significant number of former Alpha Company employees who have recently retired or been laid off.

The director's reasoning is that because Alpha manufactures some products similar to Beta's, former Alpha employees would be experienced and need little training, could provide valuable information about Alpha's successful methods and would be particularly motivated to compete against Alpha.

The director's argument is problematic in several respects.

First of all, the argument presupposes that Alpha's methods are successful. This is not necessarily the case.

On the contrary, the fact that Alpha has laid off 15 percent of its employees in every division and at every level suggests that Alpha's methods may have been unsuccessful and that downsizing had become necessary for the company to minimize financial losses.

Secondly, the director assumes that the former Alpha employees hired by Beta will be well-trained and valuable. During a lay-off, however, the best and most experienced employees are typically the last to be laid off. By following the director's advice, Beta would probably be hiring Alpha's least efficient and least experienced employees - that is, those who would be least valuable to Beta.

Thirdly, the author assumes that Alpha and Beta are sufficiently similar so that former Alpha employees could provide special value for Beta. However, we are informed only that Beta manufactures some products similar to Alpha's. It is possible that former Alpha employees who have been laid off have experience with only a small segment of Beta's product line and thus have little inside information of any value to Beta.

Finally, the claim that former Alpha employees would be motivated to compete against Alpha is partially unwarranted. While many of those who were laid off may be so motivated, those who retired early from Alpha probably departed on good terms with Alpha and would in any event be unmotivated to renter the work force.

In conclusion, the argument fails to provide key facts needed to assess it. To better evaluate the director's suggestion, we will need more information about why Alpha reduced its work force, what type of workers left Alpha and under what circumstances and how similar Alpha's range of products is to Beta's.

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