Hello -
I have taken 2 practice examples and have done terrible on the AWA section as I have run short of time. Please give me feedback on my response below. I am using the GMAT AWA 109 Sample document from GMAT Club as practice. If anyone has other advice on how to improve let me know.
Question
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.
My Response
While the author’s intent on improving the company is noble, there are large gaps in their argument that makes the reader question their claim of moving the operations of Apogee Company to a central location will improve profitability. The logic behind there argument seems to be vague in terms of supporting their claim as their is doubt of long term implementation success.
Their argument is based on a specific example being successful and correlates such success in being applicable across the company. However, there are a number of perspectives not mentioned in the author’s argument including performance (operational and staff) and products on the market. The author lacks details of the performance of field offices compared to the centralized location example in the following ways: criteria that determines improved profitability and performance of employees as there is a need for strong supervision. As employee supervision is cited as a reason to move centrally, the author fails to state why this is important. It seems there is a gap between employees and the employer in terms of trust which presents the question of the quality of Apogee Company’s recruitment process. It may be worth reviewing this process to ensure quality employees are hired so there isnt such a need to better supervise all employees better.
Logistically, moving operations to a central location can be time consuming and costly. The author’s argument fails to mention if there are available technology products on the market that promote cost cutting via automation or those available that allow employers to comfortable supervise employees. If there are products of this nature available it negates the need to move centrally.
Answer from document
In this argument the author concludes that the Apogee Company should close down field offices and conduct all its operations from a single, centralized location because the company had been more profitable in the past when all its operations were in one location. For a couple of reasons, this argument is not very convincing.
First, the author assumes that centralization would improve profitability by cutting costs and streamlining supervision of employees. This assumption is never supported with any data or projections. Moreover, the assumption fails to take into account cost increases and inefficiency that could result from centralization. For instance, company representatives would have to travel to do business in areas formerly served by a field office, creating travel costs and loss of critical time. In short, this assumption must be supported with a thorough cost-benefit analysis of centralization versus other possible cost-cutting and/or profit-enhancing strategies.
Second, the only reason offered by the author is the claim that Apogee was more profitable when it had operated from a single, centralized location. But is centralization the only difference relevant to greater past profitability? It is entirely possible that management has become lax regarding any number of factors that can affect the bottom line such as inferior products, careless product pricing, inefficient production, poor employee expense account monitoring, ineffective advertising, sloppy buying policies and other wasteful spending. Unless the author can rule out other factors relevant to diminishing profits, this argument commits the fallacy of assuming that just because one event (decreasing profits) follows another (decentralization), the second event has been caused by the first.
In conclusion, this is a weak argument. To strengthen the conclusion that Apogee should close field offices and centralize, this author must provide a thorough cost-benefit analysis of available alternatives and rule out factors other than decentralization that might be affecting current profits negatively.