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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.

The argument claims that the Apogee company was more profitable when it had all its operations in one location, and hence to increase profitability, it should close down its field office and operate from a centralized location. Stated in this way the argument fails to mention several key factors, on the basis of which it could be evaluated. The conclusion relies on assumptions, for which there is no clear evidence. Therefore, the argument is rather weak, unconvincing, and has several flaws.

First of all, the argument simply assumes that operating from several locations is the key factor of reduced profitability. The profitability of an organization depends on a lot of factors and cannot be ruled down to a single factor. The argument mentions that the company now operates from several field offices but fails to mention the reasons for operating from several locations instead of a centralized one. Over the years, a number of factors could have changed for a particular organization, including an increase in the number of employees, increase in market demand in other locations, etc. An organization should expand business depending on several factors, otherwise, its growth stagnates, and profitability reduces. The argument fails to provide any of these reasons which ultimately led to the company’s geographical expansion.

Now, let’s focus on the issue at hand, decreased profitability. A variety of factors may have led to this situation, A better competitor in the market, Apogee’s inability to sustain with improved product quality, increasing customer complaints, etc. To illustrate this, let us take the example of the Indian start-up companies, FoodPanda and Swiggy, both of which act as major food delivery partners all over India. FoodPanda had begun as a small business operating only in the major metropolitan cities and delivering food from restaurants to customers. Initially, the venture was very successful, and the owners expanded it to other locations. However, over time the profitability of FoodPanda started reducing. Customer complaints about the bad service, inability to provide fresh food on time, inexperienced delivery partners- Twitter and Facebook were flooded with complaints and issues. On the contrary, Swiggy, a capitalist venture which started from South India, had started spreading its tentacles all over the country. Customers were satisfied because issues were handled properly and in case of any complaint, they had a phenomenal “No Questions Asked” Refund Policy. Ultimately, Swiggy became the dominator of the food delivery business and overshadowed FoodPanda completely.
The example above clearly shows two companies, both start-ups, both had expanded the business to several locations, yet one survived the market and one didn’t. Profitability, therefore, cannot simply be a factor of several locations and the costs incurred in maintaining all of them. We must take several other factors into account before we can safely deduce a conclusion. And here is where the argument fails.

Lastly, the conclusion states that they should discontinue operations in other areas. Jumping into this conclusion without knowing the root cause of the issue would be a mistake. It is necessary to evaluate every missing detail and then formulate a solution to increase the profits of Apogee. Hence, without appropriate details which fill the missing gaps, this conclusion has no legs to stand on.

In summary, the argument is flawed and therefore unconvincing. It could be considerably strengthened if the author clearly mentioned all the relevant facts. In order to assess the merits of a certain situation, it is essential to have full knowledge of all contributing factors.