Dear GMAT club members,
Can anyone evaluate following AWA? Please evaluate my AWA
Sajjad1994-------------------------------------------------------------------------------------------------------------------------------------------------------------
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 maintains better supervision of all employees.”
The argument put forth by the business department in the memorandum is, in simple words, a call to action, making a case that Apogee Company should close its field offices and move its operations to a
single centralised operations as a means to improve its profitability. Memorandum offers two points-of-reasoning for shifting the business location:
1. Apogee had in past enjoyed higher profitability when its was operating from a single central location.
2. Centralised operations would lead to cost cutting and better supervision of the employees, thereby improving profitability.
However, both the reasonings offered suffer from serious fundamental flaws.
First, the business department of Apogee Company fails to understand that correlation does not imply causation: Apogee Company enjoying higher profits in the past when it was operating from a single location, does not imply that higher profitability was on account of its centralised location. There could be other factors for higher profitability such as better customer services, higher quality of goods / services, lack of competition, etc. The business department of the company does not dive deep and examine the factors on account of which Apogee Company enjoyed higher profitability in the past but merely draws a false superficial connection between location and profitability.
Another flaw in the argument is that centralised location would cut cost and hence field offices should be closed. Once again, the business department of Apogee Company fails to dive deep into the implication of such an action. Perhaps field offices of Apogee Company are near customer / client premises and can respond to any client request at the earliest. Closing field office and moving operations to a centralised location may increase the distance between the company and its customers.
Furthermore, in this era of Work from Home, many employees who may be operating out of field office may not prefer to travel all the way to a distant centralised office. The company may thus lose
star employees. The argument also does not offer any supporting to substantiate the claim that centralised office would lead to cost cutting.
Overall, the argument made by the business department of Apogee Company to increase the company's profitability is quite poorly made. The aim of increasing Apogee Company's profitability may be better served if the business department undertake root cause analysis of why the company enjoyed higher profitability previously, identifying specific advantages Apogee once enjoyed and focus on how to bring that "magic" back in the company's operations.
Thank you.