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 offic

The author claims that when the Apogee Company had all its operations in one location, it was more profitable than it was when the memorandum was written. Therefore, the author suggests that the company should close down all its field offices and conduct all its operations in a single location. The author also states that this centralization will improve profitability by cutting costs and helping the company maintain better supervision of the employees. The author fails to consider several key factors that govern profitability such as the expenses of the employees and the real estate required by the company, cost of production and many more. The author also overlooks the possibility that supervision of employees will not be impacted, as employees may perform in a similar way whether they’re being supervised or not. The conclusion of the argument relies on assumptions, which are unsupported by the argument and has clear flaws.

First, the argument readily assumes that centralization of the company will improve profitability. The author didn’t consider the key aspects required to cut costs. For example, if the company implements the centralization process, it needs to incur costs associated with the process. There isn’t enough evidence to showcase whether the costs associated with centralization will pay off in the long-term or how much will the costs lead to decrease in overall costs. The author also fails to take into consideration the human resource aspect of the company. If the company has its offices/plants in several locations, everyone might not be keen on moving as it might depend on a lot of factors.

Second, the argument claims that cutting costs can improve profitability. The author fails to consider the costs which are not associated or impacted by centralization but impact the profitability of the company. Profitability also depends on the revenue of the company, the brand equity, cost of raw materials, cost of advertising. The author didn’t consider to cut these costs and didn’t show the cost-benefit analysis of centralization. The author could’ve showed the differences between centralization and other cost-cutting methods to showcase which one’s the better one. There are some other factors which are governed by the market and the consumer which the author didn’t mention in the memorandum.

Finally, the author didn’t consider the logistical challenge and the negative impact on the revenue that the centralization would make. For example, its Apogee Company is a service-oriented company with clients all across the world, this situation will make it difficult for the company to establish communication and attract future clients. Furthermore, centralization move can also deter the company’s ability to attract talent from various cities and countries round the world. If the Apogee Company is a product-related or a manufacturing company, changing all its operations to one place will harm its access to raw materials and resources, which are essential in the production process. The centralization move can also prove to be a logistical challenge as with all its operations in one location, the company needs to move its products from one place to various cities around the country/world, which increases the shipping costs, therefore adding to the overall costs.

In conclusion, the argument is flawed for the above-mentioned reasons and is therefore unconvincing. It could be strengthened if the argument provided details and facts about the company, the cost-benefit analysis of the centralization move and how it manages to find and supervise talent. While the argument may be held true, without considerable information, it’s open to debate.