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sumeetsharma
- Newbie | Next Rank: 10 Posts
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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."
The argument claims that the Apogee Company was more profitable when the company operated from a single location and expansion has lowered the company's profits. The author further suggests that by closing down its field offices and bringing back its operations to a single location, the company can improve its profits by cutting costs and will help to supervise its employees effectively. The argument in its present form is flawed and the conclusion is based on the assumptions. Shutting down the offices in different parts of the country will cut the costs but assuming that it will improve the profits is seriously flawed. Moreover, the author assumes that profits have come down due to the expansion of the company and ignores the facts that there are other factors which also decide the profitability of the company.
The author's suggestion of closing down the field offices and carry all of its operations from a single location will help Apogee to cut the costs at first place but to accommodate the displaced workforce at a single location will add additional costs. The company will require expanding its campus and will need more infrastructures to conduct all its operations from a single place. Furthermore, closing its field offices may cause disconnect with its client in those specific areas and clients may pull out the business. Instead of profits going up, this suggestion may add additional costs to the company and affects its profits. The argument could have been strengthened if it has limited the suggestion to closing of non-performing field offices and creating zonal offices. This way the company would be able to cut costs and not to bring all the operations at a single location.
Secondly, the argument fails to consider the other aspects which decide the profitability of a company. The author cites that the company was profitable when it was operating from a single location. However, the author does not provide the numbers and profit figures for the company. It could be that profits have decreased by 1% from the initial period to the current period. This does not mean the company in its present state is not profitable.
Since the argument is based on assumptions and correlated profitability with expansion, it is not very sound or persuasive. If the argument has limited its suggestion to closing of non-performing field offices and a rational choice of creating zonal offices instead of operating from a single location, the argument would have been more thorough and convincing.
"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."
The argument claims that the Apogee Company was more profitable when the company operated from a single location and expansion has lowered the company's profits. The author further suggests that by closing down its field offices and bringing back its operations to a single location, the company can improve its profits by cutting costs and will help to supervise its employees effectively. The argument in its present form is flawed and the conclusion is based on the assumptions. Shutting down the offices in different parts of the country will cut the costs but assuming that it will improve the profits is seriously flawed. Moreover, the author assumes that profits have come down due to the expansion of the company and ignores the facts that there are other factors which also decide the profitability of the company.
The author's suggestion of closing down the field offices and carry all of its operations from a single location will help Apogee to cut the costs at first place but to accommodate the displaced workforce at a single location will add additional costs. The company will require expanding its campus and will need more infrastructures to conduct all its operations from a single place. Furthermore, closing its field offices may cause disconnect with its client in those specific areas and clients may pull out the business. Instead of profits going up, this suggestion may add additional costs to the company and affects its profits. The argument could have been strengthened if it has limited the suggestion to closing of non-performing field offices and creating zonal offices. This way the company would be able to cut costs and not to bring all the operations at a single location.
Secondly, the argument fails to consider the other aspects which decide the profitability of a company. The author cites that the company was profitable when it was operating from a single location. However, the author does not provide the numbers and profit figures for the company. It could be that profits have decreased by 1% from the initial period to the current period. This does not mean the company in its present state is not profitable.
Since the argument is based on assumptions and correlated profitability with expansion, it is not very sound or persuasive. If the argument has limited its suggestion to closing of non-performing field offices and a rational choice of creating zonal offices instead of operating from a single location, the argument would have been more thorough and convincing.
