Joined: 20 Jan 2011
Location: Viet Nam
Concentration: Finance, Entrepreneurship
WE: Corporate Finance (Venture Capital)
, given: 0
First attempt - Feedback on my AWA pal, please! [#permalink]
25 Jun 2013, 19:51
Hi guys - I'm finally able to get a day off this weekend to take the test, after 3 reschedules thanks to fricken demanding work schedule and I could only look at AWA and what GMAC wanted few days ago so please give me your feedback on my sample writing (with given official topic) below. Much kudos!
The following appeared in a memorandum from the CEO of a consumer electronics manufacturing firm to the head of the company’s human resources department, who is responsible for hiring new employees:
“Eight years ago, our firm’s profits were increasing with each new employee we added. We discovered that each employee had the skills and motivation to generate more revenue for the firm than his or her salary cost us. However, for the past two years, our profit margin has been falling, even though we have continued to add employees. Thus, our newer employees are not generating enough revenue to justify their salaries. We must not be hiring new employees with the same level of skills and motivation as those we used to attract. Clearly, then, failures in the human resources department account for our falling profits.”
In the preceding statement, the consumer electronics manufacturing firm’s CE claims that the new employees that they added within the past two years are not generating enough revenue to justify their salaries and the human resources department is responsible for the company’s falling profits. Stated in this way, the argument manipulates facts and conveys a distorted view. The conclusion of the argument relies on assumptions which is not supported by reasonable evidence. Therefore, the argument is weak, unconvincing as its argument can hardly be considered as valid.
The primary issue with the argument is the CEO’s assumption on falling profit margin was contributed by falling revenue. There is no evidence that shows the company’s revenue was decreasing while its operating costs, especially cost driven by employees’ wages and salaries was rising. Matter of fact, the company that the CEO is holding post is a consumer electronics manufacturing firm and generally in this industry, the cost of supply and material responsible for the majority of expenses. Rising costs of production driven by higher cost of energy and raw material in recent years have caused falling profit for such company like Sony even though the company made a spectacular record for its revenue.
The secondary issue with the argument is that the CEO assumed that the company increased the number of employees with the same level of skills and motivation as those they used to attract. He failed to consider the fact that the new employees that human resources department recruited to the company to replace the ones who retired or moved on to work for its competitor.
However, the CEO might be able to make a stronger argument by providing factual information such as the increasing total salaries expense supported by evidence and a financial reports that show falling revenue while costs other than salaries expenses have been consistent. Without convincing example or evidence, one is left with the impression that the claim is more of a personal thinking rather than a substantive statement.
In conclusion, the argument is flawed due to the aforementioned reasons and is therefore unconvincing. In order to assess the merits of a certain situation, it is essential to have full knowledge of all contributing factors. Without this information, the argument remains unsubstantiated and open to debate.