Prompt - 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.” Discuss how well reasoned . . . etc.
The memorandum is states that the company will become more profitable if it consolidates into one office versus' its current situation of multiple offices. This line of reasoning is based on faulty assumptions and lack of background to prove said assumptions
The writer assumes that, because in the beginning - having just one office - the company was more profitable and as the company expanded into multiple offices the profits have diminished as a result. This assumption relies on the notion that the dismissed profits specifically stem from having multiple offices. The writer does not take into considered that the lack of profits could be a result of Apogee taking on debt to expand operation. Typically, as a company grows cash flow takes a hit as funds are used to fuel a company's growth. If the expansion into more offices has caused an uptick in shipping or an increase in taxes - operating in more than one state - then blaming the loss in profit on multiple offices may be warranted
A second issues arises from the notion that the centralization back into one would be seamless. It may difficult to just shut down all the field offices in a timely matter. There may be leases on the field office buildings or if they were bought they would have to be sold, potentially at a lost creating a further dig at profits. It also doesn't mention if the company has grown since it was at just one office. What if the old central location cannot hold all the new employees? Apogee would have to buy, lease, or even building a new location. If the original location was capable of housing all the employees of the company this idea may be feasible
The final issues comes from the writer mentioning a better supervision of all employees and how it correlates to the profitability of the company. The writer doesn't mention if the lack of profits comes from a decline in productivity or not. If the company has seen the productivity of its employees decline since expanding into multiple field offices then this assumption correlates to diminished profits. However, the memorandum overlooks other such possibilities; Apogee may have been in an emerging market and seen a loss in market share, the product produces could of a been a trend, or there could have been a misstep in a business model. The writer also fails to mention whether or not the supervision of the employees has changed or loosen since the expansion
The conclusion of the memorandum relies too much on unwarranted and unproven assumptions. There is more to be desired about the previous profitability of Apogee and how it relates to the company being in one location