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abbs
Joined: 03 May 2017
Last visit: 19 Jun 2019
Posts: 8
Given Kudos: 19
Location: India
Schools: IE Sept19 Intake (A)
GMAT 1: 620 Q42 V32
GPA: 3.2
03 May 2017, 09:04
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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
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The business department of Apogee company states that the company was more profitable when it was centralized compared to the present scenario of having field offices at different locations. This argument is substantially flawed.The argument presents inconclusive information ,offering dubious support,and from this draws unreasonably far reaching conclusions.
The argument states that the company was 'more' profitable. It doesn't quantify how much profitable it was. This is a very ambiguous measurement. If the company made a profit of $ 100,000 and at present it makes only $98,000 ,it doesn't make any sense to shut-down all its current operations and to re-instate the centralization. Hence this grand sweeping conclusion is unwarranted.
Secondly,the argument expects that this new move will cut the costs and thus improves profitability. Also, it presumes that this will helps to supervise all of its employees better. This is really nonsensical. Because,it fails to provide any substantive evidence that explains the lesser profitability of the company at present time. It is quite possible that the raw-material and production costs during the time of centralization were much lesser than that of today. Thus the increased profits. Also, there is a chance that the pertinent supervision of employees may backfire as it may actually hinder the employee satisfaction which is critical for any company's success. It is well proven by many of the top global firms that a flexible and relaxing atmosphere is a better workplace for it;s employees than having an environment where the supervisors constantly breath down the neck of its employees.
Finally,any company goes for decentralization when it expands. Hence it needs to have regional offices to cater to its wider customer base. Scrapping off such regional offices may actually become counter-productive as it could bring down its profits even further.
Due to the above stated reasons the hyperbolic overstatement that the company will make more profits by centralization is neither sound nor persuasive. Had the argument provided any data of other companies of the same time period that shows increased profitability by centralization , the argument could have been more sound. Again, further evidence that shows how centralization will cut down the profits is also inevitable.
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Please also tell me is the word count good enough. This is 360 words. I feel i am quite slow.
“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 business department of Apogee company states that the company was more profitable when it was centralized compared to the present scenario of having field offices at different locations. This argument is substantially flawed.The argument presents inconclusive information ,offering dubious support,and from this draws unreasonably far reaching conclusions.
The argument states that the company was 'more' profitable. It doesn't quantify how much profitable it was. This is a very ambiguous measurement. If the company made a profit of $ 100,000 and at present it makes only $98,000 ,it doesn't make any sense to shut-down all its current operations and to re-instate the centralization. Hence this grand sweeping conclusion is unwarranted.
Secondly,the argument expects that this new move will cut the costs and thus improves profitability. Also, it presumes that this will helps to supervise all of its employees better. This is really nonsensical. Because,it fails to provide any substantive evidence that explains the lesser profitability of the company at present time. It is quite possible that the raw-material and production costs during the time of centralization were much lesser than that of today. Thus the increased profits. Also, there is a chance that the pertinent supervision of employees may backfire as it may actually hinder the employee satisfaction which is critical for any company's success. It is well proven by many of the top global firms that a flexible and relaxing atmosphere is a better workplace for it;s employees than having an environment where the supervisors constantly breath down the neck of its employees.
Finally,any company goes for decentralization when it expands. Hence it needs to have regional offices to cater to its wider customer base. Scrapping off such regional offices may actually become counter-productive as it could bring down its profits even further.
Due to the above stated reasons the hyperbolic overstatement that the company will make more profits by centralization is neither sound nor persuasive. Had the argument provided any data of other companies of the same time period that shows increased profitability by centralization , the argument could have been more sound. Again, further evidence that shows how centralization will cut down the profits is also inevitable.
------------------------------------------------------------------------------
Please also tell me is the word count good enough. This is 360 words. I feel i am quite slow.
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