Joined: 03 Aug 2011
Location: United States
Concentration: General Management, Entrepreneurship
GMAT 1: 750 Q49 V44
WE: Engineering (Computer Software)
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The following appeared as part of an annual- Feedback Please [#permalink]
23 May 2012, 23:44
Hi, I'd appreciate a critique on my argument essay. I especially want confirmation of my usage of examples "fujifilm and kodak". I read on another forum that these statistics or events can be made up to the suit the purpose.
The following appeared as part of an annual report sent to stockholders by Olympic Foods, a processor of frozen foods.
“Over time, the costs of processing go down because as organizations learn how to do things better, they become more efficient. In color film processing, for example, the cost of a 3-by-5-inch print fell from 50 cents for five-day service in 1970 to 20 cents for one-day service in 1984. The same principle applies to the processing of food. And since Olympic Foods will soon celebrate its twenty-fifth birthday, we can expect that our long experience will enable us to minimize costs and thus maximize profits.”
Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
The author argues that Olympic Foods will be lowering operating costs and increasing profits because of its long experience. To support this conclusion the author presents an example of a film processing company that was able to reduce its operating costs over a similarly long period. The author also supports the conclusion by stating a general trend in organizations – that organizations learn how to do things better with time, leading to better efficiency and lower costs. However, presented as such, the argument is unconvincing for two reasons.
First, the author draws a parallel between a film processing company and a food processing company under the flawed assumption that the two companies should operate similarly. Even among companies in the same industry the behavior of one company does not predict the next. For example, consider Kodak and Fujifilm, two film processing companies. Fujifilm was able to lower its operating costs between 1990 and 2000 by moving its factories to Thailand. Meanwhile Kodak’s costs increased over the same 10 year period. The assumption that a food processing company should parallel a film processing company would be even less valid and clearly this example does not support the argument.
Second, the author makes a blanket statement that over time organizations improve their efficiency and inevitably reduce their operating costs. This statement is open to criticism for two reasons. First the statement assumes that all things that contribute to operating costs are becoming more efficient – or in other words efficiency is outweighing inefficiency over time. What if the management team performs poorly over time? What if mismanagement results in inefficiency with suppliers, distributors, and others? What if the company is bought or sold? Without answers to these questions, the argument fails to address reasonable counter examples. Secondly, the statement does not take into account extrinsic factors such as cost of materials, cost of energy and cost of labor. Any of the aforementioned costs could increase over time thereby increasing operating similarly. Overall, although the statement of organizations improving efficiency and lowering operating costs over time is true in some cases, it is a stretch to assume it applies in all cases and the particular case of Olympic Foods.
As it stands the author’s conclusion is not compelling. To strengthen the conclusion that Olympic Foods will be able to lower its operating costs the author would have to provide evidence specific to the company itself. The author would have to prove that Olympic foods has increased its operating efficiency over the past 25 years and provide examples how. Furthermore, the author would have to provide evidence that extrinsic factors to the company that affect costs will not affect its operating costs negatively.