When the Apogee Company had all its operations in one location, it was

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 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 its conclusion.

Ans:

The Apogee Company’s business department has claimed in a memorandum that the organization should shut down its field offices so as to reduce overall costs, and improve profits. This argument is based on the sound management principle of cutting costs through business centralisation. However, it fails to make a convincing stand because of a number of reasons.

Firstly, the argument provides no information regarding the time period of comparison. It states that at some point of time, when all operations of the Apogee Company were at a single location, the company was more profitable than it is currently. We have no way to ascertain how long back was the condition as stated. The claim assumes that the economic conditions and other variable factors have remained the same across the years. However, since no information is provided regarding this, we cannot determine with certainity whether centralised operations in the present would help the business reap greater profits. It may well be that costs have increased or competition has grown. In any case, the argument discounts any such changes that may have occurred over time.

Secondly, the argument assumes that business operations will continue in the usual and regular fashion if the company shuts down its field offices. However, many employees may choose to leave due to geographical limiations, rent and utility costs may increase depending on the location. Additionally, the firm will need to establish new network and supply chain channels at the central location in order to manage the business at a larger scale from a single location.

Finally, it is possible that the firm would find it difficult to conduct business across a vast geographical area from a single location. It can be more inconvenient and expensive for the business to send its agents to off shore locations in order to meet various stakeholders, such as clients, suppliers etc., regularly.

In summary, the claim given by the Apogee Company is flawed for a number of reasons, as discussed above. However, it can be strengthened by providing additional relevant information that can help us in making a more comprehensive decision.