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Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
14 Aug 2013, 15:37
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"SuperCorp recently moved its headquarters to Corporateville. The recent surge in the number of homeowners in Corporateville proves that Corporateville is a superior place to live then Middlesburg, the home of SuperCorp's current headquarters. Moreover, Middleburg is a predominately urban area and according to an employee survey, SuperCorp has determined that its workers prefer to live in an area that is not urban. Finally, Corporateville has lower taxes than Middlesburg, making it not only a safer place to work but also a cheaper one. Therefore, Supercorp clearly made the best decision. "
The argument offered in support of Supercorp having made the best decision to move to Corporateville, is simply flawed. I will give three reasons, the most fundamental one being that what is best for Supercorp's employees may not coincide with what is best for Supercorp as a whole --- corporation and employer.
Let me begin by elaborating on the flaw just mentioned. Even if Corporateville is indeed a better place for employees to live, it does not follow that Corporateville is overall a better place for Supercorp compared with Middlesburg. The reason is simply that employee satisfaction, though important, is not the only important factor that a corporation should consider when it decides to move to a new city. Other factors it might consider include: the educational level of those living in the new city, proximity to strategic partners (and even competitors), and even financial incentives from that new city to encourage it to move there. The argument would be strengthened, thus, by showing how these factors are present in the new city. For instance, it might show that Corporateville is closer to strategic partners in emerging economies such as China.
The second serious flaw in the argument is that it fails to even show that Corporateville is a better place to live, just by pointing out the surge in the number of homeowners there. The increased number of homeowners in Corporateville may plausibly be the result of lower interest rates nationwide. Or, the higher rate of home ownership could be a function of more factories having opened in Corporateville, which might actually decrease the standard of living in the city. Therefore, the surge in home-ownership can be the result of a whole host of forces besides liveability. This argument, then, would be strengthened by providing the results of a comprehensive survey relevant to liveability, showing how Corporateville's climate, outdoor recreation, cost of living, access to arts and entertainment, and the like, are all superior to those of Middlesburg.
The third problem in the argument is that it fails to show that Corporateville is indeed a cheaper place to live. It only cites the "lower taxes". Not only does it not identify whether it is sales tax, property tax, business taxes, or all taxes it is concerned with, the more important problem is that taxes are only one source of expenditures in a household's budget. It could be that groceries and rent are more expensive in Corporateville. This argument, then, needs to show results that other items in an employee's expenditure, such as groceries, rent, service, recreation, and so forth, are less expensive in Corporateville.
Thus, the argument is flawed on many accounts, from conflating rising home ownership with being a better place to live, to confusing lower taxes with affordable living overall,and lastly, to equating employee satisfaction with what is best for the corporation as a whole. The conclusion does not follow from its premises, and so this argument should be rejected.
The argument offered in support of Supercorp having made the best decision to move to Corporateville, is simply flawed. I will give three reasons, the most fundamental one being that what is best for Supercorp's employees may not coincide with what is best for Supercorp as a whole --- corporation and employer.
Let me begin by elaborating on the flaw just mentioned. Even if Corporateville is indeed a better place for employees to live, it does not follow that Corporateville is overall a better place for Supercorp compared with Middlesburg. The reason is simply that employee satisfaction, though important, is not the only important factor that a corporation should consider when it decides to move to a new city. Other factors it might consider include: the educational level of those living in the new city, proximity to strategic partners (and even competitors), and even financial incentives from that new city to encourage it to move there. The argument would be strengthened, thus, by showing how these factors are present in the new city. For instance, it might show that Corporateville is closer to strategic partners in emerging economies such as China.
The second serious flaw in the argument is that it fails to even show that Corporateville is a better place to live, just by pointing out the surge in the number of homeowners there. The increased number of homeowners in Corporateville may plausibly be the result of lower interest rates nationwide. Or, the higher rate of home ownership could be a function of more factories having opened in Corporateville, which might actually decrease the standard of living in the city. Therefore, the surge in home-ownership can be the result of a whole host of forces besides liveability. This argument, then, would be strengthened by providing the results of a comprehensive survey relevant to liveability, showing how Corporateville's climate, outdoor recreation, cost of living, access to arts and entertainment, and the like, are all superior to those of Middlesburg.
The third problem in the argument is that it fails to show that Corporateville is indeed a cheaper place to live. It only cites the "lower taxes". Not only does it not identify whether it is sales tax, property tax, business taxes, or all taxes it is concerned with, the more important problem is that taxes are only one source of expenditures in a household's budget. It could be that groceries and rent are more expensive in Corporateville. This argument, then, needs to show results that other items in an employee's expenditure, such as groceries, rent, service, recreation, and so forth, are less expensive in Corporateville.
Thus, the argument is flawed on many accounts, from conflating rising home ownership with being a better place to live, to confusing lower taxes with affordable living overall,and lastly, to equating employee satisfaction with what is best for the corporation as a whole. The conclusion does not follow from its premises, and so this argument should be rejected.
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