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nandinibasu27
Joined: 17 Sep 2015
Last visit: 26 Mar 2017
Posts: 13
Given Kudos: 10
Location: India
Concentration: Finance, Strategy
Schools: HKUST '17 (A) IE '18 NUS '17 (WD) NTU '17 ISB '17 (A)
GMAT 1: 710 Q49 V36
23 Nov 2015, 08:15
Kudos
Bookmarks
AWA:
The following appeared in a memorandum from the business department of the XYZ Company.
“When the XYZ Company had all its operations in one location, it was more profitable than it is today. Therefore the XYZ Company should close down 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 you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound and what, if anything, would help you better evaluate in conclusion.
MY RESPONSE:
The memorandum from the business department of the XYZ Company states that the company should close down its offices apart from one location and conduct its operations from a single location with a view to cut costs and help the company maintain better supervision of all employees.
Such argument is not correct for various reasons. Firstly, the memorandum states that the profit of the company was higher in the past when its operation was centralized compared to the present when the operations are decentralised. The argument draws its conclusion from the past event rather than evaluating the present reasons for less profitability.
Moreover, it may be so that in the past the Company was smaller in size and hence it made business sense for it to be centralised. However, with the increase in profitability, the Company expanded in size and adopted the model of decentralization. Without evaluating the reasons for less profitability, it does not make a business case to question the decision of decentralisation.
Thirdly, profitability of a Company cannot be increased simply by closing down all offices apart from one location and conduct all its operations from that location. There are other methods of cutting costs. Also, the cost of the maintaining an establishment housing all the staffs of other locations as well compensating the employees relocating from their base due to the probable shift of the offices from the locations near to their homes to the final centralised location can be extremely high and can offset the profits made by cutting costs of maintaining the offices in various locations. Also, the employees used to in decentralised style to supervision may not take the decision of centralised supervision well and this can result in attrition which may in turn increase the costs further rather than bringing them down.
It is also not mentioned whether the Company has diligently evaluated all the factors contributing to the lower profits before arriving at the conclusion of shutting down offices and conducting all its operations from a single location. If such details are mentioned as well, then it will be easier to analyze the viability of such conclusion. Hence, the Company should evaluate all its options before deciding to close down its operations and conduct all its operations from a single location.
The following appeared in a memorandum from the business department of the XYZ Company.
“When the XYZ Company had all its operations in one location, it was more profitable than it is today. Therefore the XYZ Company should close down 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 you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound and what, if anything, would help you better evaluate in conclusion.
MY RESPONSE:
The memorandum from the business department of the XYZ Company states that the company should close down its offices apart from one location and conduct its operations from a single location with a view to cut costs and help the company maintain better supervision of all employees.
Such argument is not correct for various reasons. Firstly, the memorandum states that the profit of the company was higher in the past when its operation was centralized compared to the present when the operations are decentralised. The argument draws its conclusion from the past event rather than evaluating the present reasons for less profitability.
Moreover, it may be so that in the past the Company was smaller in size and hence it made business sense for it to be centralised. However, with the increase in profitability, the Company expanded in size and adopted the model of decentralization. Without evaluating the reasons for less profitability, it does not make a business case to question the decision of decentralisation.
Thirdly, profitability of a Company cannot be increased simply by closing down all offices apart from one location and conduct all its operations from that location. There are other methods of cutting costs. Also, the cost of the maintaining an establishment housing all the staffs of other locations as well compensating the employees relocating from their base due to the probable shift of the offices from the locations near to their homes to the final centralised location can be extremely high and can offset the profits made by cutting costs of maintaining the offices in various locations. Also, the employees used to in decentralised style to supervision may not take the decision of centralised supervision well and this can result in attrition which may in turn increase the costs further rather than bringing them down.
It is also not mentioned whether the Company has diligently evaluated all the factors contributing to the lower profits before arriving at the conclusion of shutting down offices and conducting all its operations from a single location. If such details are mentioned as well, then it will be easier to analyze the viability of such conclusion. Hence, the Company should evaluate all its options before deciding to close down its operations and conduct all its operations from a single location.
27 Nov 2015, 09:17
Kudos
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Can anyone check my essay?please...i write on Thursday!
AWA
The following appeared as part of a memorandum from the loan department of the Frostbite National Bank: “We should not approve the business loan application of the local group that wants to open a franchise outlet for the Kool Kone chain of ice cream parlors. Frostbite is known for its cold winters, and cold weather can mean slow ice cream sales. For example, even though Frostbite is a town of 10,000 people, it has only one ice cream spot—the Frigid Cow. Despite the lack of competition, the Frigid Cow’s net revenues fell by 10 percent last winter.”
Response
In this memorandum,the arguer claims that the Frostbite National Bank should not approve loans for people who want to open a franchise outlet for the Kool Kone.To support this claim,the arguer points out that Frostbite’s weather is very cold during winter which leads to reduced sales during these months.However,close inspection of the argument reveals several logical problems which render the argument unconvincing as it stands.
First,the whole argument is based on the cold winter that Frostbite experiences and that does not help to increase the sales of ice creams.But,ice creams are more popular during spring and summer.However, the arguer does not provide any information about the sales during these months.
Second,the author supports that net revenues of the only ice cream spot at the region fell by 10 percent last winter.He also mentions that there is lack of competition but he does not clarify if there are other ice cream spots in the near villages.Moreover, it would be essential that he provide us with information about the sales and the revenues of the Frigid Cow during the whole year.If the revenues of the Frigid Cow were increased during the summer months,then the bank would approve the loan.But if the ice cream spot experienced drop to net revenues during these months,then the loan department of the bank most probably would decline the loan.
In conclusion,the argument is not well-founded.To strengthen it,this arguer would have to provide information regarding the sales and the revenues of the current ice cream spot and how far there is the next ice cream spot.However,without such information the arguer’s reasoning does not provide concrete support for;certainly it does not constitute an elaborate proof of the conclusion,which,thus,renders the argument unconvincing.
AWA
The following appeared as part of a memorandum from the loan department of the Frostbite National Bank: “We should not approve the business loan application of the local group that wants to open a franchise outlet for the Kool Kone chain of ice cream parlors. Frostbite is known for its cold winters, and cold weather can mean slow ice cream sales. For example, even though Frostbite is a town of 10,000 people, it has only one ice cream spot—the Frigid Cow. Despite the lack of competition, the Frigid Cow’s net revenues fell by 10 percent last winter.”
Response
In this memorandum,the arguer claims that the Frostbite National Bank should not approve loans for people who want to open a franchise outlet for the Kool Kone.To support this claim,the arguer points out that Frostbite’s weather is very cold during winter which leads to reduced sales during these months.However,close inspection of the argument reveals several logical problems which render the argument unconvincing as it stands.
First,the whole argument is based on the cold winter that Frostbite experiences and that does not help to increase the sales of ice creams.But,ice creams are more popular during spring and summer.However, the arguer does not provide any information about the sales during these months.
Second,the author supports that net revenues of the only ice cream spot at the region fell by 10 percent last winter.He also mentions that there is lack of competition but he does not clarify if there are other ice cream spots in the near villages.Moreover, it would be essential that he provide us with information about the sales and the revenues of the Frigid Cow during the whole year.If the revenues of the Frigid Cow were increased during the summer months,then the bank would approve the loan.But if the ice cream spot experienced drop to net revenues during these months,then the loan department of the bank most probably would decline the loan.
In conclusion,the argument is not well-founded.To strengthen it,this arguer would have to provide information regarding the sales and the revenues of the current ice cream spot and how far there is the next ice cream spot.However,without such information the arguer’s reasoning does not provide concrete support for;certainly it does not constitute an elaborate proof of the conclusion,which,thus,renders the argument unconvincing.
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