GMAT Essays (AWA)

Argument:
Company X's revenue was higher last year compared to this year. Company X has outsourced it departments to different regions of the country since last year. Therefore, if the company wants to improve it's profit it has to centralize its department in order to reduce costs and control its employees better.

Answer:
The Argument here about the decision of centralization of all departments of Apogee company by its business department is not very well-thought.
Business division has reached this decision by observing only one point - the profitability when all the divisions were centralized to one location. So, they think, by stopping all field offices and centralizing all divisions to one location, they can cut the operating cost, and improve the employee productivity because they can supervise them closely. However, they overlook many aspects regarding this for e.g. if they have to supply their products to new customers how they will cover if they don't have nearby field offices, if they have to provide maintenance service to existing customers with defined SLA then how will they meet their SLA, if they have to send their representatives then they have to pay extra allowances for travel and lodging. Also, business department didn't think about inflation which will anyway increase the cost. Hence rather than concentrating on centralize the location the business department must think other innovative ways or new avenues to improve the overall revenue or reduce the operating margin like understand the business sentiment of the market and innovate new products to suite the market needs.
So we can conclude that the argument is unidirectional and don't cover the other aspects of business and rather express the only idea of centralization of location to improve the profitability.