GMAT Essay Topic 518 - The following appeared in a memorandum from the director of research and development at Ready -to-Ware, a software engineering firm. "The package of benefits and incentives that Ready -to-Ware offers to professional staff is too costly. Our quarterly profits have declined since the package was introduced two years ago, at the time of our incorporation. Moreover, the package had little positive effect, as we have had only marginal success in recruiting and training high -quality professional staff. To become more profitable again, Ready-to-Ware should, therefore, offer the reduced benefits package that was in place two years ago and use the savings to fund our current research and development initiatives." Discuss how well reasoned . . . Etc.
Author: joiedeviv | Date: October 6, 2008 | Score:4 | => 5 or 6 Essays, Click Here <=
In accordance to the director of the firm the profits of the firm declined only from the time since it has introduced the package of benefits and incentives for the staff, and director finds the only way to increase profits is to cut off all of such packages, which will enable the company to achieve increase in profits. Statement of the director seems plausible because it only considers the package as the sole reason for the decline in the profits of the company and ignore all of the other possibilities of due to which decline might have occurred. Therefore further I will discuss the argument contrary to the director’s opinion.
Ready to ware requires a through analysis of the causes for the decline in its profits rather that blaming the benefits or incentives as the only reasons for reduced earnings of the firm. There are possibilities that inadequate research equipment or insufficient resources required in the research and development might have contributed to continuous loss in every quarter since last two years. Moreover reduced earnings could also be a result of the mismanagement on the part of the high management of the Ready to Ware software. Therefore to reach on effective conclusion a precise analysis of all the consequences must be done, so that relative remedies could be reached.
On the other hand if the firm ready to ware cut off the package it may experience decrease in efficiency and attrition at the hands of the employees, this kind of situation will worsen the case further. In addition new recruitment may also become difficult for the employer as the company appears not enough attractive to the highly professional people, who are seeking jobs. Therefore the cutoff exercise of benefits and incentives will not lead to the improvement of Ready to Ware but infect it will deteriorate the profits further.
From all of the above discussion it can be concluded that the Ready to Ware must gather the exact information for its reduced earnings and should therefore act on that information, and this is the only appropriate solution for the firm.