Prompt from
OG: “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 response:
The argument states that Apogee Company was more profitable when it operated out of a single office. The conclusion that closing down its field offices and centralising operations to improve profitability is far-fetched, and relies on assumptions which may not be true. Further, it fails to assess and provide relevant data to substantiate the above conclusion.
Firstly, the evidence that the company was more profitable when operated out of a single office might be statistically true, but fails to account for the nature of business of the company. A new company might initially find it profitable to operate out of a single location, but to expand and increase market share and/or revenue, it is often imperative to have numerous field offices which are geographically distant from each other. The argument provides no indication of the nature of business, and whether it is even feasible to expand sales and revenue by only operating out of one single location. Basically, the idea that profitability is only linked to the physical number of offices is far-fetched and unsubstantiated.
Secondly, the closure of numerous field offices might drastically reduce the field information and network required for the company to grow. If,for instance, the company was dealing in fertilisers, it might be crucial to have numerous field offices spread across different geographical locations to ascertain market conditions and requirements in different areas. Closure of such offices might quantitatively reduce expenditure, but the cost-benefit analysis would almost certainly reveal that closure of these offices would prove harmful in the long run. Often when a company expands, it can sustain lower profitability in view of long-term gains in market share which would eventually justify the need for multiple field offices.
Thirdly, the logic of centralising operations to reduce costs is also flawed because it fails to assess the feasibility of having every employee of the company under one roof. If,for instance, the company has operations in multiple countries, it might even be impossible to relocate every employee to one location. The point about better supervision also lends itself to the same problem, that if there are a large number of employees,it might not be feasible to supervise and coordinate the activities of every employee simultaneously. Further, there might be extra costs incurred in employing supervision equipment to ensure the managers are aware of their employees’ activities real-time.
Thus, this argument provides a far-fetched conclusion which might actually be detrimental to the company in the long run. If the author could provide evidence about how all employees could be brought to a single location, and if the nature of business supports centralised operations as opposed to field offices, the argument could be strengthened. The argument is rather weak and does not justify the closure of field offices to improve profitability of the company.