The following appeared in a report presented for discussion at a meeting of the directors of a company that manufactures parts for heavy machinery:
"The falling revenues that the company is experiencing coincide with delays in manufacturing. These delays, in turn, are due in large part to poor planning in purchasing metals. Consider further that the manager of the department that handles purchasing of raw materials has an excellent background in general business, psychology, and sociology, but knows little about the properties of metals. The company should, therefore, move the purchasing manager to the sales department and bring in a scientist from the research division to be manager of the purchasing department."
The report produced by the heavy machinery company does not make a good case for moving the purchasing manager to the sales division and hiring a scientist for the role purchasing manager. The report assumes that the falling revenues can be attributed to the manager’s lack of expertise in metal properties, but I will refute the certainty of this claim.
The first problem with the report is that it confuses correlation with causation. The report concludes that because the falling revenues of the company coincide with delays in manufacturing that means that the falling revenues are the result of delays in manufacturing. Another factor, such as increased competition and a corresponding decrease in the price of manufactures could be a more significant cause of decreased revenues. If this is true, then the company will have to reevaluate its proposed solution.
Additionally, even if delays and poor planning were the cause of the falling revenues, there is no logical link made between the manager’s inability to purchase raw materials and knowledge about the properties of metals. The report simply finds a weakness in the purchasing manager’s background and extrapolates that this must be the cause of the delays in manufacturing and low revenues, and that he must be replaced with a scientist with knowledge about metal properties. If the problem of purchasing were result of an inability to negotiate with a supplier, there is no evidence to suggest that scientists are better at negotiating than those with backgrounds in business, psychology and sociology and they would be making a poor decision by moving the scientist. Finally, the decision to move the purchasing manager to the sales department is not substantiated by the report. Although he has a business background, the company’s directors did not prove that he would be able to run the department better than its current head.
This report is logically unsound. For it to be logical the company would have to investigate the actual reasons for their declining revenues and make its decisions based on facts rather than assumptions.
"The falling revenues that the company is experiencing coincide with delays in manufacturing. These delays, in turn, are due in large part to poor planning in purchasing metals. Consider further that the manager of the department that handles purchasing of raw materials has an excellent background in general business, psychology, and sociology, but knows little about the properties of metals. The company should, therefore, move the purchasing manager to the sales department and bring in a scientist from the research division to be manager of the purchasing department."
The report produced by the heavy machinery company does not make a good case for moving the purchasing manager to the sales division and hiring a scientist for the role purchasing manager. The report assumes that the falling revenues can be attributed to the manager’s lack of expertise in metal properties, but I will refute the certainty of this claim.
The first problem with the report is that it confuses correlation with causation. The report concludes that because the falling revenues of the company coincide with delays in manufacturing that means that the falling revenues are the result of delays in manufacturing. Another factor, such as increased competition and a corresponding decrease in the price of manufactures could be a more significant cause of decreased revenues. If this is true, then the company will have to reevaluate its proposed solution.
Additionally, even if delays and poor planning were the cause of the falling revenues, there is no logical link made between the manager’s inability to purchase raw materials and knowledge about the properties of metals. The report simply finds a weakness in the purchasing manager’s background and extrapolates that this must be the cause of the delays in manufacturing and low revenues, and that he must be replaced with a scientist with knowledge about metal properties. If the problem of purchasing were result of an inability to negotiate with a supplier, there is no evidence to suggest that scientists are better at negotiating than those with backgrounds in business, psychology and sociology and they would be making a poor decision by moving the scientist. Finally, the decision to move the purchasing manager to the sales department is not substantiated by the report. Although he has a business background, the company’s directors did not prove that he would be able to run the department better than its current head.
This report is logically unsound. For it to be logical the company would have to investigate the actual reasons for their declining revenues and make its decisions based on facts rather than assumptions.
