To maintain our competitive edge in pharmaceutical research over the next decade, our firm must either double its internal budget dedicated to proprietary drug discovery or acquire small, venture-backed startups specializing in targeted gene therapies. Because doubling our internal discovery budget would overextend our cash reserves and risk severe financial instability, we must pursue aggressive acquisitions of these gene-therapy startups.
The executive's argument is most vulnerable to criticism on the grounds that it
- fails to consider that the firm could maintain its competitive edge through alternative strategies, such as joint ventures or licensing agreementsAnswer
- Btakes for granted that small gene-therapy startups will automatically accept acquisition offers from larger pharmaceutical firms
- Cconcludes that acquiring startups is necessary by relying on evidence that demonstrates acquisitions would reduce competitive edge
- Dtreats the risk of financial instability as the main conclusion of the argument rather than as a supporting premise
- Euses excessively hostile language toward the option of expanding the internal discovery budget to force approval of startup acquisitions
Answer
The argument is vulnerable to criticism because it fails to consider that the firm could maintain its competitive edge through alternative strategies, such as joint ventures or licensing agreements.
The correct answer correctly points out that the argument relies on a false dilemma. The executive assumes that doubling internal R&D and acquiring startups are the only two available choices to maintain a competitive edge. By failing to account for alternative methods such as licensing or partnerships, the executive prematurely concludes that acquisition is the only viable path.
Step-by-Step Solution
Key Concept
False Dilemma and Unwarranted Assumptions