GMAT Essays (AWA)

The following appeared in a report from a management-consulting firm to the CEO of Telamon Industries.
“ Ten years ago, Telamon Industries had factories in 11 states. Over the last decade, as Telamon has centralized all of its operations in one plant located in its home state, it has also become less profitable. Thus we recommend that Telamon reduce the size of the central facility in its home state and open smaller facilities in other states. Doing so will enable the company to increase profitability by taking advantage of the lower labor costs in other states. ”

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 underlie the thinking and what alternative explanations or counter-examples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.

The management-consulting firm claims that the company, Telamon, began losing money because it became a centralized company. The report also claims that if the company were to decentralize and branch out into other states it would lead to increasing profits because it would be taking advantage of the lower labor costs in other states. The author of this report is not persuasive at all, and has many flaws.
The author assumes that the centralization of the company was the only cause for lower profits for the company. Could it be that the economy no longer demands Telamon Industries products or services? There are not any statistics showing by how much less the company is making as compared to previous years.
The author also assumes that if the company decentralizes away from its home town, and makes smaller facilities in other states that it can take advantage of the lower labor costs in those states. The author of the report fails to realize that in some states property taxes are higher. The author does not take into account all the other variables that take place, and only assumes that the lower labor costs will allow the company to increase profits.
Now you might be able to argue against this and state "no matter what variable you change the company will still be better off if it has a lower labor cost in other states." Although this might be true, you have to remember that the company is less profitable. We need to know "why" is it less profitable? Is it because it has too many employees or is it because it is not selling enough products?
The argument would be much stronger and much more persuasive if it contained evidence and proof on to why the company has lost profits over the decade, and also proof to if centralizing is the cause of lowered profits. Any CEO reading this would read it with a grain of salt. The argument the author uses is largely flawed because it is not supported with good statistical evidence. The argument also lacks any proof for its claims. Any management-firm can make a pitch, but if a it is looking to get a deal, the management firm has to come up with a better argument.



I'm coming really close to my test - almost 10 days away, if I could get this graded id be very thankful THANK!

Pretty good. My one main comment is that, in your 3rd body paragraph, you slipped into discussing the issue itself rather than the author's reasoning. Remember that the point of this essay type is to focus on the author's faulty assumptions, which you did well in the first two body paragraphs.

Other than that, nothing major. I'd try to add a sentence or two in each paragraph if you're shooting for a 6, though.

I'd give you a 4 as it is, a 5 if you fixed the 3rd paragraph, and a 6 if you fixed the 3rd paragraph and wrote a bit more.

VP_Jim wrote:Pretty good. My one main comment is that, in your 3rd body paragraph, you slipped into discussing the issue itself rather than the author's reasoning. Remember that the point of this essay type is to focus on the author's faulty assumptions, which you did well in the first two body paragraphs.

Other than that, nothing major. I'd try to add a sentence or two in each paragraph if you're shooting for a 6, though.

I'd give you a 4 as it is, a 5 if you fixed the 3rd paragraph, and a 6 if you fixed the 3rd paragraph and wrote a bit more.

Hey great help man! Just one question. In the 3rd paragraph you stated i was talking about the issue. I am a little confused as what you mean by this. I thought i was just explaining in detail "why" the authors assumption is there.

thanks..

Can you evaluate my work on the same topic.

The conclusion of the management consulting firm is quite weak, because its suggestion, about the location of the industry operations, is based on the past profitability of the Telamon, without any evidences that link the profits to the past strategy (about having factories in 11 states). Moreover the consulting firm states that with stables in different countries the Telamon Industries will take advantage of the lower labor cost, without any data provided. There are so many piece of evidence, each one tenuously connected to the conclusion by unsubstanding assumption that it is not persuasive.

The consultant firm doesn't provided any documentation about the reasons of the higher profit of the Telamon Company of ten years ago, on its analysis it implies that the lower profit margin is due to the changes of the distribution of the Telamon factories location. Maybe this wasn't the main reason, it could be happened that other similar industries are born and now the competition is much harder than ten years ago. Or Telamon during the last year didn't improve ad update its product, losing part of its customers.

On the other hand the choice of reduce the plants to only one could be due to the high costs of transportation among the plants, and coming back to the previous distribution could raise the costs instead of the margins.

Moreover the consulting firm states that having factories in different states the Telamon can take advantage of the lower labor wages. But it's not clear how the labor costs impact on the total production cost of the Telamon, maybe it produces high-technology equipments and so it needs very expensive equipments and a good R&D department with high skilled workers, and it is less interested in lower salary of its employees.

Some reliable details and statistical analysis of the real cost and advantage that Telamon can have in spreading its plants in different states, it will be useful to better understand the impact of this strategy and state if it is or not the best strategy for Telamon to improve its profits.




Thanks...