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Prompt:
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 essay:
The argument focus on closing all the location of the Company and focus operations just in one of them. The main reason lay in the idea to be more profitable with one location by cutting costs, maintaining better supervision to employees and the fact that when the Company had only one location presented more profit than nowadays. The reasoning is flawed in several ways. It will be discuss the assumption that the only reason of a previous profit was the amount of location and not others factors, the statement that the one location must reduce costs even it must maintain the level of production and finally the general idea the supervision will be more easy in only one location.
The initial fact to sustent the argument take an event of the past, not specifying the amount of years ago and ensure it will be maintain the same. The idea to create a causal effect relationship between the number of location and the profit the Company can get is a wrong path. The reason why the Company had profit in the past can laid in aspects as less inflation, policies beneficies the Company, the less competition in the market and more others. There must be many differents explanation of the good results than the number of location. Also, even if the assumption is correct, this not necessary will maintain now because the time can change the scenary.
Considering the relationship stable, the statement that the centralization must reduce costs can be cuestionable. Although is true some tasks can be more efficient to have in one location, there are also different cost that will increase. For example, the one location must maintain the same production so it needs to be bigger enough, also the movement of the equipment of the other locations and the new employees necessary in the location. Again, there is one assumption that closing the others field location must not be costly, hard to believe because of the compensation for the employees, the movements and more.
Finally, the statement of centralization permitted a better supervision of all the employees can be discuss in different ways. If the employees of other location will be move to only one, some will need to be pay more because of the distance. But if the Company decided to fire them, the salary of the new employees can be even higher because of the new tasks and more responsabilities. Even if the salaries and employees maintain, if the one location will be more big than usual location for accomplish the amount of products, its hard to supervise more employees and in a bigger space.
Overall, the argument of the quantity of location having a positive impact in the profit the Company can get have more flaws than the ones discussing. To ensure the effect, they need to make a Deep study of the factors generating the profit in both times (before and now). Also, if there is enough reasons to only have one location, there must be an evaluation to decide which location maintain in level of profit, structure, distance, impact in clients, and more.