Apogee Company Case Summary

This excerpt from the memorandum states that Apogee company was more profitable when it was operated from one location, but now it is less profitable than it was earlier. Then the author also goes on to suggest that the Apogee company should close down all it field offices and conduct all operation from a single location. However, the suggested plan is not quite well reasoned.

The author assumes that the profit of the company is linked to it central location based on just a corelation. It might be possible that circumstances or market conditions have changed since the company opened the field offices, and these circumstances might be the actual cause of the decline in profits. The author also suggests that centralization would help in cutting costs and improving supervision. This actually assumes that the business has an operational structure that alows centralization of its operations and also that existing employees will be wiling to relocate to the new centralized office, or if not, then they can be replaced. …show more content…
However, the author fails to consider other facts that might have caused the decline in revenue after the company expanded its operations. One possibilility might be that new competitors' products have caused decline in margins for the company's products. Another, might be that a large pool of employees have recently exit the company. There are quite a lot of possibilities that might have caused the decline in profits. Unless the business department provides some statistical or research data, which definitely links the decline in profitability to the expansion of the company, the current corelation between the two events can be assumed to be just