Prompt
The following appeared in a speech by a stockholder of Consolidated Industries at the company’s annual stockholders’ meeting:
“In the computer hardware division last year, profits fell significantly below projections, the product line decreased from 20 to only 5 items, and expenditures for employee benefits increased by 15 percent. Nevertheless, Consolidated’s board of directors has approved an annual salary of more than $1 million for our company’s chief executive officer. The present board members should be replaced because they are unconcerned about the increasing costs of employee benefits and salaries, in spite of the company’s problems generating income.”
Discuss how well reasoned . . . etc.
The argument claims that the present board members of the Consolidated Industries should be replaced because they are unconcerned about the increasing costs of employee benefits and salaries, in spite of the company’s problems generating income. Stated in this way, the argument fails to consider several key factors on the basis of which it could be evaluated. The conclusion relies on assumptions for which there is no clear evidence. Hence, the argument is unconvincing and has several flaws.
First, the argument readily assumes that the company has problems generating income because one of the divisions of the company, the computer hardware division, made profits below expectations. This statement is a stretch. For instance, the company could be making profits exceeding expectations at other divisions of the company such as software or service. Clearly, the reasoning that the entire company has problems generating income due to one division which failed to make expected profit last year, is flawed. If the argument had explicitly mentioned that all divisions of the company made unsatisfactory profits or the profits from other divisions were insufficient to generate income for the company, then the argument would have been a lot more convincing.
Second, the argument claims that replacing the current board members is the solution to the company’s income problems. This is again a very weak statement as the argument does not demonstrate any correlation between replacing board members and improved profit or income generation. That is, the argument does not mention any evidence of inefficiency of the present board members. Since the argument claims that the present board approved employee benefits and a salary of more than $1 million for the company’s CEO, it could likely be the cases that the company is doing well in other divisions. Furthermore, the present board members might have improved the company’s market share in a dwindling economy. The argument could be much clearer if it had provided evidence that the present board members are inefficient and that changing board members would generate expected income.
Finally, has the author considered performance of competitors to Consolidated Industries last year? Also, has the company achieved their cost-cutting targets last year to reward their employees and CEO with benefits and higher salary respectively? Without convincing answers to these questions, one is left with an impression that the claim is more wishful thinking than substantive evidence.
In conclusion, the argument is unconvincing due to the above mentioned reasons. It could be considerably strengthened if the author had mentioned all the relevant facts, such as profits in other divisions, performance of present board members, and market share. In order to assess the merits of the claim that present board members should be replaced, it is essential to have full knowledge of all the contributing factors. Without this information, the argument remains unsubstantiated and open to debate.