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20 Jul 2015, 23:17
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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 memorandum issued by the Apogee company states that, the company was profitable when it had all its operaitons in single location. So it argues that in order to be profitable again, the company should shut down all its field offices and operate from single location. Stated in this way the argument has failed to consider several important key factors, on the basis of which it could be evaluated. The conclusion of the argument relies on assumptions for which there is no clear evidence. Hence the argument is unconvincing and has several flaws.
Firstly, the argument has failed to analyse why the current distributed operating model is not profitable. Although the net result is a loss, some of the offices could be profit making. Shutting down those profit making offices is not correct. Instead of closing down all of its offices, Apogee could consider to shut down only the loss making offices. In fact, it would be better to analyse the problems in these loss making offices. The problems could be external factors, like local competition, logistics or internal factors, like inefficient operations, unskilled laborers etc. Depending on the problem, it would be better to devise a strategy to address the root cause of the problem. In this way, Apogee can turn the loss making office into profit making office.
Secondly, the argument readily assumes that moving back to single location will be profitable. This is again weak and unsupported claim as the argument does not explicitly mention whether proper cost-benefit analysis was conducted. The analysis is significant as it will reveal the strengths and weakness of distributed and centralized operating model in terms of costs involved and benefits earned. Such a systematic analysis would reveal the facts and provide a quantitative information to make an informed decision.
Finally, the argument has failed to understand the synergies involved in moving back to single location. Since the offices has been operating individually, integrating them into a single stem will bring new challenges like employee attrition, customer service disruption and negative remarks in the market. The argument does not state how well the company is prepared for such a large scale of synergies involved. Without convincing explanations on this, one is left with the impression that the argument is incomplete.
In conclusion, the argument is based on the unsupported assumptions and it lacks a clear vision on the transformation. A better argument would validate the alternate choices, provide substantial quantitive facts and explain the preparedness for the synergies. Without these information, thsi poorly reasoned memorandum is very less likely to convince its people and likely to bring a debate.
“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 memorandum issued by the Apogee company states that, the company was profitable when it had all its operaitons in single location. So it argues that in order to be profitable again, the company should shut down all its field offices and operate from single location. Stated in this way the argument has failed to consider several important key factors, on the basis of which it could be evaluated. The conclusion of the argument relies on assumptions for which there is no clear evidence. Hence the argument is unconvincing and has several flaws.
Firstly, the argument has failed to analyse why the current distributed operating model is not profitable. Although the net result is a loss, some of the offices could be profit making. Shutting down those profit making offices is not correct. Instead of closing down all of its offices, Apogee could consider to shut down only the loss making offices. In fact, it would be better to analyse the problems in these loss making offices. The problems could be external factors, like local competition, logistics or internal factors, like inefficient operations, unskilled laborers etc. Depending on the problem, it would be better to devise a strategy to address the root cause of the problem. In this way, Apogee can turn the loss making office into profit making office.
Secondly, the argument readily assumes that moving back to single location will be profitable. This is again weak and unsupported claim as the argument does not explicitly mention whether proper cost-benefit analysis was conducted. The analysis is significant as it will reveal the strengths and weakness of distributed and centralized operating model in terms of costs involved and benefits earned. Such a systematic analysis would reveal the facts and provide a quantitative information to make an informed decision.
Finally, the argument has failed to understand the synergies involved in moving back to single location. Since the offices has been operating individually, integrating them into a single stem will bring new challenges like employee attrition, customer service disruption and negative remarks in the market. The argument does not state how well the company is prepared for such a large scale of synergies involved. Without convincing explanations on this, one is left with the impression that the argument is incomplete.
In conclusion, the argument is based on the unsupported assumptions and it lacks a clear vision on the transformation. A better argument would validate the alternate choices, provide substantial quantitive facts and explain the preparedness for the synergies. Without these information, thsi poorly reasoned memorandum is very less likely to convince its people and likely to bring a debate.
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