Kindly, Rate the following essay:Quote:
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.”
Essay:
The argument claims that Apogee Company should close its field offices and conduct its operations from one location. However, it wrongly infers that the company is facing reduction in profits due to its dispersed operations, it assumes that the company's costs will reduce due to centralized operations and does not provide the cost breakdown of the company to support this claim, and it also assumes, without any basis, that the company lacks in its current employee supervision. Hence, the argument seems weak and flawed.
First, the argument states that the company was running in profits when it had all its operations in one location. Based on this statement the argument claims that since the company is gaining fewer profits now, it should close its field offices and centralize its operations again. However, the argument fails to take into account that the reduction in profits may not be due to the company's dispersed operations, rather it might be due to some other factors. For example, the reduction in profits might be due to an increase in raw material costs, or the lower profitability might be an industry-wide problem rather than a company-specific issue. Hence, without proper statistics, it would be wrong to assume that the cause of reduced profits is the dispersion of operations.
Second, the argument states that the company can reduce its costs by shutting down its field operations. However, it fails to analyze the cost breakdown of the company. If for example, the company considers transportation as a major cost, then the company will face a major increase in transportation costs due to such a closure. Hence, in such circumstance, the company will face a net increase in costs and the argument's claim of cost reduction would fail.
Third, the argument states that the company will be able to maintain better supervision of its employees by centralizing its operations. Here, the argument assumes that the company is currently lacking in employee supervision and does not provide any facts to support this assumption. Even if the assumption were true, it may not be the case that the dispersion of operations might cause a reduction in supervision. For example, managing a hundred employees in one location is more difficult for a single supervisor, than managing groups of ten employees at different locations by many supervisors.
Lastly, the argument fails to consider the reduction in market share due to the closure of its operations. It might be the case that the company is providing better customer service due to its dispersed operations. Hence, in such scenarios, closing field offices would result in a decrease in customer service, in turn, resulting in a decrease in customer satisfaction, and hence, a net loss of market share.
In conclusion, the argument seems weak. However, it can be strengthened by providing statistics to support the assumption that the loss of profits is, indeed, due to dispersed operations, by giving an analysis of its cost structure, or by toning down the language of the conclusion presented. But, in the given light of information, the argument fails to support its claim.