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 following argument is flawed because Apogee is only considering one fact which is affecting its profitability. The fact that having many field offices has bought down profitability, rather than having one central location which could improve their profitability.
This argument is assuming that having all the field offices shut and operating out of one location would increase profits. It fails to consider that the possible reason for profitability can be of various factors, such as having lower sales compared to previous years or maybe even higher operational costs. If the argument had explicitly mentioned that there is no other reason. Apart from the poor performance of the field offices, from which they are incurring higher expenses and leading to lower profitability, it would have provided the clarity needed to derive to this judgment.
Having a centralization structure can not be a key factor for increased profitability. Some employees might not like the fact of being constantly supervised. As compared to working in a field office they might have had more flexibility and would have led to achieving higher productivity. Now being in a centralized structure they could feel pressured with constant supervision and it could lower morale leading to lower productivity levels.
There is a lack of research to justify whether if closing field offices would improve profits. Apogee has to consider the fact of the losses they will face, from the customer's point of view. It will become harder for them to reach out and if they face any issues someone else can pop up and offer them a better service and winning the business. Apogee also fails to account for the advertisement that they were able to attain being in various locations as compared to operate from just one location.
To conclude, the argument fails to account for the loss of employee morale, loss of advertisement, and no supporting evidence as to why their profitability has lowered. They should rather conduct thorough research and identify the bottleneck and then take a calculated decision. Rather than closing down multiple field offices based on instincts.
“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 following argument is flawed because Apogee is only considering one fact which is affecting its profitability. The fact that having many field offices has bought down profitability, rather than having one central location which could improve their profitability.
This argument is assuming that having all the field offices shut and operating out of one location would increase profits. It fails to consider that the possible reason for profitability can be of various factors, such as having lower sales compared to previous years or maybe even higher operational costs. If the argument had explicitly mentioned that there is no other reason. Apart from the poor performance of the field offices, from which they are incurring higher expenses and leading to lower profitability, it would have provided the clarity needed to derive to this judgment.
Having a centralization structure can not be a key factor for increased profitability. Some employees might not like the fact of being constantly supervised. As compared to working in a field office they might have had more flexibility and would have led to achieving higher productivity. Now being in a centralized structure they could feel pressured with constant supervision and it could lower morale leading to lower productivity levels.
There is a lack of research to justify whether if closing field offices would improve profits. Apogee has to consider the fact of the losses they will face, from the customer's point of view. It will become harder for them to reach out and if they face any issues someone else can pop up and offer them a better service and winning the business. Apogee also fails to account for the advertisement that they were able to attain being in various locations as compared to operate from just one location.
To conclude, the argument fails to account for the loss of employee morale, loss of advertisement, and no supporting evidence as to why their profitability has lowered. They should rather conduct thorough research and identify the bottleneck and then take a calculated decision. Rather than closing down multiple field offices based on instincts.
