GMAT Essay Topic 412 - 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.
Author: Mini01 | Date: March 21, 2012 | Score:5
A company that has a centralised work structure generates more profits and enables more supervision over the jobs fulfilled by employees.However, the statement is not very convincing. When the operations of a company are wide spread, the company needs to decentralise its wrok structure to help th...
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The argument that Apogee Company was more profitable at the time of operations at one location is lacking complete information about the reason behind it. As from this argument we are not clear about at how many locations does the above company have its operation. Secondly, to know profitability at a certain location we need more information about that location and company area of interest.
Since, company has operations at different locations so it will be better to understand its operational culture as we didn't get any information about it. Instead of closing field offices firstly company have to brain storm the problems because of which they are not able to make profits from these offices. By closing field offices company will send wrong signals to its investors and consumers that company is not very well in administration of its resources and in discipline.
They can make field offices profitable but right supervision and by motivating employees to give their best in assigned work. As right attitude and approach of employees towards their work is best way to make offices performance better. Centralization can help in cost cutting but centralization can reduce its market share also which will reduce its profit margin.Instead of doing centralization company have to find better management structure and weekly reviews of field offices so that they were able to perform better as per expectation of management.