GMAT Essays (AWA)

Analysis of an argument


The following appeared in a memorandum from the business department of
the Apogee company:

"When the Apogee Company had all its operation in one location, it was
more profitable than it is today. Therefore the 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 when Apogee Company had all its operation in
one location, it was more profitable than it is today. Therefore the
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. Stated in this way the argument fails to
mention several key factors, on the basis of which it could be
evaluated. The conclusion of the argument relies on assumption for
which there is no clear evidence. Hence, the argument is weak and has
several flaws.


First, the argument readily assumes that the quality of the product
made by Apogee has not decreased or deteriorated. Even if the quality
of product remains same,the question worth asking is whether it is comparable
to that of the new products in market .Clearly, there are
chances that profitability decreased because the technological
advances inculcated by other companies made their product way better.
The argument could have been much clearer if it explicitly stated that
the standard of product produced by Apogee was up to the mark.

Second, the argument fails to consider a possibility that competition
in the market increased which resulted in decrease in profit. For
example, if few companies which produce the same things as Apogee
opened in the vicinity of the area than that spoils the market for
Apogee. Customers tend to get attracted to new products. The
competitor might have advertised the product well and deceased the
cost in order to grab attention. If the argument had provided evidence
that Apogee Company has no new competitors in the market then the
argument would have been a lot more convincing.


Finally, the argument assumes that relocation will not increase the
maintenance cost. It is true the centralization would help the company
maintain better supervision but it ignores the fact that relocation of
so many employees and closing down the field office will be a costly
affair. Also an important question that the argument should answer is
that has the company size increased in last few years? Will
accommodating so many employees from field location to one location
require extra space and money?. Without convincing answers to these
questions, one is left with the impression that the claim is more of a
wishful thinking rather than substantive evidence.


In conclusion, the argument is flawed for the above-mentioned reasons
and is therefore unconvincing. It could be considerable strengthened
if the author clearly mentioned all the relevant facts regarding the
competitive market, increase in company size and quality of the
product.