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 (n. ) 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.
The author argues that the expansion of Apogee Company's operations to other locations has resulted in lower profitability and the solution to increase profitability and to maintain better supervision of its employees is to close down its other offices. The argument is flawed and illogical as it fails to consider all the relevant factors surrounding the Company's operations and therefore, the argument is weak and unsubstantiated.
Firstly, the author assumes that the previous approach of operating in one location adopted by Apogee Company is still profitable in the current situation. The author failed to elaborate on the number of years Apogee Company is in operation and hence, whether its previous strategy of having its operations in one location is still applicable in the current era. For example, previously, before air travel and internet was prevalent, many local companies only operate in their own district and do not compete in other areas. However, in the current era, customers have many choices and this includes purchasing products from various countries and hence this has redefined the way companies operate. Hence, this point is crucial to consider before accepting the author's assumption.
Secondly, the author suggested a solution to increase profitability by closing down its field offices and conduct operations from a single location. This argument is better substantiated if the author could provide a direct correlation between operating from one central location and profitability. The author fails to consider the strategy of Apogee Company, the competitive environment of the industry Apogee Company operates in, the demographics of the Company's customers and the supplier profile of the Company. For instance, if the Company's strategy is to diversify its risks such that if anything were to happen to its head office, the other offices would be able to run seamlessly to service all its customers. Therefore, having multiple locations is a crucial part of its strategy and hence short-term monetary considerations is not of the utmost importance to the Company at present. If the author could provide further insights to the various other components of the Company's business, this would result in a better discussion of the issue at debate.
Lastly, the author argued that centralisation, not only cuts costs, but it also helps maintain better supervision of all employees. The author assumes that better supervision of all employees translate to better monetary returns for the Company and will be beneficial for the Company. It fails to consider that in the current era, most employees do not like to be micromanaged and thrive better with a certain degree of autonomy. Hence, micromanaging by pooling all employees in one single location can, in fact, create mistrust and lower down productivity of employees that will in turn translate into lower profits. The centralisation will cut down costs inevitably due to lower cost base from operating in one location vis-a-vis operating in various locations but whether the decrease in costs is just once-off is not further explored by the author.
In conclusion, the author attempts to provide a simplistic solution to increase profitability of Apogee Company without further consideration of various other factors. The argument will be strengthened if the author elaborated on the points discussed above and provide concrete examples as to how the plan suggested will be a feasible solution both in the short term and the long run.
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