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16 Sep 2018, 04:02
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Prompt
The following appeared as part of a recommendation by one of the directors of the Beta Company:
“The Alpha Company has just reduced its workforce by laying off 15 percent of its employees in all divisions and at all
levels, and it is encouraging early retirement for other employees. As you know, the Beta Company manufactures
some products similar to Alpha’s, but our profits have fallen over the last few years. To improve Beta’s competitive
position, we should try to hire a significant number of Alpha’s former workers, since these experienced workers can
provide valuable information about Alpha’s successful methods, will require little training, and will be particularly
motivated to compete against Alpha.”
Discuss how well reasoned . . . etc.
Response (Word Count - 571)
The director of Beta Company claims that by hiring former employees of Alpha Company, Beta Company’s competitive position will improve. This short sighted claim hinges on a number of unwarranted assumptions making the argument weak and unconvincing.
Firstly, while the author points out that Beta Company produces some products that are common to Alpha’s, the author fails to describe any other similarity between the two firms. It would be crucial to know whether Alpha and Beta are similar in size and scale and whether both compete in the same market in terms of geography and customer base. If both firms are different, it would be important to know whether Beta possesses the requisite infrastructure to enable former Alpha employees to function at the best of their abilities. However, the argument omits such evidence. Therefore, it remains unclear whether former employees of Alpha Company crossing over to the Beta Company might actually serve Beta Company’s end objective.
Secondly, the argument does not mention the condition of the market that the two firms compete in. It could be entirely possible that Alpha’s downsizing might be a reaction to a declining market. In that case, hiring these workers might be of little benefit to Beta because if the market for products, which both firms manufacture has declined, then it makes little sense to attract workers of a competing firm in order to compete in the same market. On the other hand, it could also be that in an effort to control its costs, Alpha resorted to downsizing. Clearly, given that Beta is also facing a decline in profits, employing more workforce of a competing firm will most likely worsen the situation.
Thirdly, the author presumes that former Alpha employees when employed at Beta, will demonstrate similar or better skill as well as will and motivation. In assuming so, the author completely omits factors like Beta’s existing processes, policies, and work environment, which may or may not necessarily be conducive to realizing the benefits of these employees. The author also assumes that Beta’s current situation of declining profits has everything to do with its workforce and fails to consider other reasons. For instance, a shrinking customer base, inferior manufacturing processes and equipment, and finally lower order volumes could be some of the reasons for declining profits. It is equally likely that Beta may be finding it difficult to cut its existing costs. In such a scenario, hiring more employees is likely to place additional burden on Beta’s already significant costs.
Finally, the author concludes that hiring Alpha’s former workers will improve Beta’s competitive position. While the usage of the term ‘competitive position’ might suggest different scenarios, it is unclear if the issue of declining profits will be addressed. In other words, the argument doesn’t sufficiently close the gap between declining profits and improving competitive position. To illustrate, Beta may be fetching a good revenue after employing most of Alpha’s workforce and capture a significant portion of the market share. However, if profits show no improvement, then the new recruitment would be self-defeating in its purpose.
In summary, due to the reasons mentioned above, the argument is unpersuasive. It would be important to know the degree of similarity between the two firms, the current and future market condition of the products that are common to both firms and lastly an indication of improved profits after Alpha’s employees are recruited. Without such evidence, the argument remains unsubstantiated.
The following appeared as part of a recommendation by one of the directors of the Beta Company:
“The Alpha Company has just reduced its workforce by laying off 15 percent of its employees in all divisions and at all
levels, and it is encouraging early retirement for other employees. As you know, the Beta Company manufactures
some products similar to Alpha’s, but our profits have fallen over the last few years. To improve Beta’s competitive
position, we should try to hire a significant number of Alpha’s former workers, since these experienced workers can
provide valuable information about Alpha’s successful methods, will require little training, and will be particularly
motivated to compete against Alpha.”
Discuss how well reasoned . . . etc.
Response (Word Count - 571)
The director of Beta Company claims that by hiring former employees of Alpha Company, Beta Company’s competitive position will improve. This short sighted claim hinges on a number of unwarranted assumptions making the argument weak and unconvincing.
Firstly, while the author points out that Beta Company produces some products that are common to Alpha’s, the author fails to describe any other similarity between the two firms. It would be crucial to know whether Alpha and Beta are similar in size and scale and whether both compete in the same market in terms of geography and customer base. If both firms are different, it would be important to know whether Beta possesses the requisite infrastructure to enable former Alpha employees to function at the best of their abilities. However, the argument omits such evidence. Therefore, it remains unclear whether former employees of Alpha Company crossing over to the Beta Company might actually serve Beta Company’s end objective.
Secondly, the argument does not mention the condition of the market that the two firms compete in. It could be entirely possible that Alpha’s downsizing might be a reaction to a declining market. In that case, hiring these workers might be of little benefit to Beta because if the market for products, which both firms manufacture has declined, then it makes little sense to attract workers of a competing firm in order to compete in the same market. On the other hand, it could also be that in an effort to control its costs, Alpha resorted to downsizing. Clearly, given that Beta is also facing a decline in profits, employing more workforce of a competing firm will most likely worsen the situation.
Thirdly, the author presumes that former Alpha employees when employed at Beta, will demonstrate similar or better skill as well as will and motivation. In assuming so, the author completely omits factors like Beta’s existing processes, policies, and work environment, which may or may not necessarily be conducive to realizing the benefits of these employees. The author also assumes that Beta’s current situation of declining profits has everything to do with its workforce and fails to consider other reasons. For instance, a shrinking customer base, inferior manufacturing processes and equipment, and finally lower order volumes could be some of the reasons for declining profits. It is equally likely that Beta may be finding it difficult to cut its existing costs. In such a scenario, hiring more employees is likely to place additional burden on Beta’s already significant costs.
Finally, the author concludes that hiring Alpha’s former workers will improve Beta’s competitive position. While the usage of the term ‘competitive position’ might suggest different scenarios, it is unclear if the issue of declining profits will be addressed. In other words, the argument doesn’t sufficiently close the gap between declining profits and improving competitive position. To illustrate, Beta may be fetching a good revenue after employing most of Alpha’s workforce and capture a significant portion of the market share. However, if profits show no improvement, then the new recruitment would be self-defeating in its purpose.
In summary, due to the reasons mentioned above, the argument is unpersuasive. It would be important to know the degree of similarity between the two firms, the current and future market condition of the products that are common to both firms and lastly an indication of improved profits after Alpha’s employees are recruited. Without such evidence, the argument remains unsubstantiated.
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