Please rate my essay, GMAT in 2 days
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21 Sep 2016, 00:30
Argument:
“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.”
My answer :
The argument states that, the Apogee company was more profitable when it conducted operations from a single location and hence it should stay that way. Though the argument looks cogent and convincing, it is flawed for 3 key reasons.
Firstly, the argument indicates that centralization is the only factor in maximization of profits. Some major factors such as levels of competition, consumer demand, price of available substitutes, logistics of the company which impact the profitability have been grossly ignored.
Secondly, the argument implies that centralization would improve profitability. The argument does not mention the kind of work or the sector the Apogee company is involved in. The company might have a clientele spread across the country which would require the company to have operations all over the place to provide better service and reduce the costs which in turn account for profitability.
Lastly, the argument assumes that centralization would help maintain better supervision of all employees. It is not certain that the company was not able to properly supervise the employees in field offices. The main reason for the decline in profitability might be the senior management who lack the right skill and are themselves at flaw and not the managers at field offices.
In conclusion, though centralization might have been the reason for the decline in profitability, the argument does not reflect this. The argument is unwarranted as it poorly relates profitability to centralization and supervision of employees. A full description of the relevant market conditions, and the relative performance of Apogee company against competitors would prove more substantive evidence to analyze the argument. Based on this argument, it is unlikely centralization will have a direct impact on its overall performance.