The following appeared in a memorandum from a member of a financial management and consulting firm:
“We have learned from an employee of Windlas, Ltd., that its accounting department, by checking about 10 percent of the last month’s purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients, increase their net gains, we should advise each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigorousness of our methods.”
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 counter examples 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 its conclusion.
The argument claims that checking all purchase invoice will help clients increase their net gains. The conclusion of the argument is based on the premise that such practice led to desired result in one such case. Stated this way argument over emphasis on the premise and makes extreme conclusion in leap of faith, without testing the applicability and effects of replication on other clients. The argument is unconvincing and has several flaws.
First, the argument relies on one cited case and assumes that when replicated will lead to same increase in gains for all clients. Argument fails to take in account the limitations other client might have. For example, rechecking is time taking process, when replicated for all purchase invoice can limit the time in major actions and result in reduction in overall gains. Clearly, argument fails to account the resource consumption leading to drop in another non-negotiable metric.
Secondly, the argument fails to consider that case of windlass can be an exception, attributing to their poor operations leading to results and could be a solve exclusive to them. In fact, other clients might have automated error testing software’s to avoid or eliminate such error up to 100% without resource investment from accounting department. In fact, for other clients, rechecking the purchasing invoice for errors and inconsistency might lead to reduction in employee output and reduce the overall productivity of entire department.
Finally, the argument assumes such recommendation will influence Windlass accountability on consulting firm by demonstrating windlass their own adopted method. What if windlass already has plan to fix their high errors and inconsistency in similar fashion, then they will not credit consulting firm for recommendation.
In addition, argument doesn’t address the right questions to evaluate the efficiency of recommendation. What are other levers getting affection because of recheck in error and inconstancy in purchase invoice? How many relevant base cases have the firm considered before recommending the clients for strategy adoption? What are the chances of similar increase in gains, when the recommended strategy is adopted by varied client set? Without convincing answer to these questions, one is left with the impression that the claim is more of a wishful thinking rather than data backed recommendation.
In conclusion the argument is flawed for the above-mentioned reason and is therefore unconvincing. It can be strengthened if author clearly mentioned all the relevant facts. In order to access the success of a plan, full knowledge of all contributing factors and their consequence is essential. In this particular case, firm fails to back the recommendation with relevant effect on contributing factor, resources and clients gains. Without this information, the argument remains unsubstantiated and open to debate.