The following appeared in a memorandum from the business department of the Apogee Company:
"When the Apogee Company had all its operations in one location, it was more profitable than it is today. Therefore,
the Apogee Company should close down its field offices and conduct all its operations from a single location. Such
centralization would improve profitability by cutting costs and helping the company maintain better supervision of all
employees."
Discuss how well reasoned . . . etc.
Analysis:
The memorandum of Apogee company states that centralizing all operations from a single place would improve profitability by reducing costs and a better supervision of employees.This argument is flawed as it does not substantiate the same and also it fails to consider several factors like availability of raw material,labor, transportation charges etc .
The argument is majorly flawed as it considers centralizing all operations as the only way to increase profits. .Firstly,centralizing all operations might increase the cost of production. For example: In case of Dairy industry,milk is initially processed in nearby field office,there by reducing transportation costs.Also,field offices might be present in places where labor charges are low and Government subsidies are available.Therefore, closing of all the field offices would increase transportation cost, labor charges etc.
The argument is also based on the assumption that closing all the field offices and centralizing would help the company to better supervise its employees. This is flawed, as it fails to consider the fact that as the number of employees increase in a location, the better supervision is tough. For example: It is easier to supervise an office of 200 people than an office of 2,000,000 people.Instead, company can improve supervision of its employees better by re-organizing its structure.
The argument also fails to consider factors like centralizing all its field offices might reduce the clients. For example: TCS has several offices in China,India,Australia etc thereby supporting respective clients. Closing an office in China might make TCS reduce its profits.
Thereby, the argument would be more valid if it would consider all the above several factors and substantiate them accordingly.
[/u]
"When the Apogee Company had all its operations in one location, it was more profitable than it is today. Therefore,
the Apogee Company should close down its field offices and conduct all its operations from a single location. Such
centralization would improve profitability by cutting costs and helping the company maintain better supervision of all
employees."
Discuss how well reasoned . . . etc.
Analysis:
The memorandum of Apogee company states that centralizing all operations from a single place would improve profitability by reducing costs and a better supervision of employees.This argument is flawed as it does not substantiate the same and also it fails to consider several factors like availability of raw material,labor, transportation charges etc .
The argument is majorly flawed as it considers centralizing all operations as the only way to increase profits. .Firstly,centralizing all operations might increase the cost of production. For example: In case of Dairy industry,milk is initially processed in nearby field office,there by reducing transportation costs.Also,field offices might be present in places where labor charges are low and Government subsidies are available.Therefore, closing of all the field offices would increase transportation cost, labor charges etc.
The argument is also based on the assumption that closing all the field offices and centralizing would help the company to better supervise its employees. This is flawed, as it fails to consider the fact that as the number of employees increase in a location, the better supervision is tough. For example: It is easier to supervise an office of 200 people than an office of 2,000,000 people.Instead, company can improve supervision of its employees better by re-organizing its structure.
The argument also fails to consider factors like centralizing all its field offices might reduce the clients. For example: TCS has several offices in China,India,Australia etc thereby supporting respective clients. Closing an office in China might make TCS reduce its profits.
Thereby, the argument would be more valid if it would consider all the above several factors and substantiate them accordingly.
[/u]
