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.
The author argues that Apogee Company improves profitability by closing down its field offices and conducting all its operations from a single location. To support this argument, the author states that such centralization would improve profitability by cutting costs and helping the company mainta...
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The argument claims that Apogee Company should conduct all its operations from a single location because this move will improve profitability by cutting costs and will help the company maintain better supervision of all employees. stated this way the argument does not reveal certain key factors necessary to evaluate this argument. It is also based on certain unstated assumptions and baseless reasoning. In view of these flaws, the argument remains unconvincing.
First, the argument claims that when the company had all its operations at one location, it was more profitable than it is today. This claim is unsupported and fails to mention the factors that led to less profits. The argument does not put light on how long before was Apogee Company working from one location and what were the main sources of profit for the company. Any new company starts its operations from one location and as it starts making profits or analyses that expansion to more locations will lead to long term profitability, it decides to expand. The business domain of the company is not given which makes it difficult to further evaluate the reason for expansion. The reason for lower profits might be that the investment might not have started to show the return and may take longer to turn profits. Had the author provided the relevant facts the argument could have been more persuasive.
Second, the argument assumes that conducting all its operations from one location will cut costs and help in better supervision of employees and thus will be profitable for the company. The author should have conducted a proper study for realising the reasons for the less profitability of the business expansion to arrive at this particular solution for turning the company profitable. It is well known that business should have a long term view with respect to profitability. Hence, any solution that is not well researched and analysed will lead the company to losing its brand image, loyal customers etc.
To sum up, the argument fails to convince in the absence of the above mentioned flaws. The author must incorporate relevant facts to make the argument more convincing.