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 o

The author of the argument has failed to convince us that it would be for the best interest of the Apogee Company to close down its field offices and conduct all its operations from a single location in an effort to increase profitability. The argument, as it stands, is based on questionable assumptions and a faulty line of reasoning, a fact which renders it over simplistic and unconvincing.

First of all, the author assumes that the reason the Apogee Company is not so profitable as it was in the past is that it does not have all its operations in one location as it used to. However, he fails to see that many other possible reasons could have contributed to the decrease in the profitability of the company. For instance, an unsuccessful product could have been launched in the market or a product that did not come up to the expectations of the company. It could also be explained by the entrance of new competitors in the field where the company operates, by poor management or even by a recession in the economic circle. Nevertheless, the author, without providing any explanation that would help us explain the reason of the economic downturn, jumps to conclusions and suggests questionable solutions.

Second, another assumption of the arguer is that centralization would improve profitability by cutting costs and helping the company better supervision of all the employees. However, he fails to realize that the cost of closing down facilities, transferring some employees, compensating others, since there would be a reduction in the personnel, and investing in new facilities in one location may be much higher not to mention the turbulence inside the company and the possibility of losing clients in local marketplace. Moreover, better supervision of the employees is not a guaranteed result of centralization, since the conduct of all operations from one location could mean an increase in management levels, conflict of power, and difficulty in communication, a fact which could negatively affect effective management.

Finally, even if we accept that profits are diminishing because of decentralization, an important piece of information is missing that would better help us to evaluate the suggested solution. For how long has the decentralization been into effect? If it is a short period of time, then it is only natural for the company to have increased expenses resulting from the investment. Time should be allowed before reaching conclusions concerning the profitability of such an investment.

To conclude, the argument based on unsubstantiated assumption and poor evidence does not provide concrete support for its conclusion, If it had concluded the items discussed above, like more precision for the background of the company, a business analysis that suggests the economical feasibility of the proposition and that centralization is optimized for this company and how long did decentralization negatively affected the profitability, it would have been more thorough and convincing.