The following is from an editorial that appeared in a River City newspaper.
“The Clio Development Group wants to build a multilevel parking garage on Dock Street in River City, but the plan should not be approved. Most of the buildings on the block would then have to be demolished. Because these buildings were erected decades ago, they have historic significance and must therefore be preserved as economic assets in the effort to revitalize a restored riverfront area. Recall how Lakesburg has benefited from business increases in its historic downtown center. Moreover, there is plenty of vacant land for a parking lot elsewhere in River City.”
The following appeared in a memorandum from the development director of the Largo Piano Company.
“The Largo Piano Company has long been known for producing carefully handcrafted, expensive pianos used by leading concert pianists. During the past few years, however, our revenues have declined; meanwhile, the Allegro Musical Instrument Company introduced a line of inexpensive digital pianos and then saw its revenues increase. In order to increase Largo’s sales and in fact outsell Allegro, we should introduce a line of digital pianos in a variety of price ranges. Our digital pianos would be likely to find instant acceptance with customers, since they would be associated with the prestigious Largo name.”
1， The increase of revenue may just coincided with the sale of inexpensive digital pianos, while the two actually had no causal realationship.
2， The strategy used in other companys may not be suit for the Largo Piano.
3， The expected instant acceptance with customers may not be the case. As the fact the author cited, the revenue of the Largo Piano have declined during the past five years, it may no longer own the prestige.
The following appeared in a memorandum from the director of research and development at Ready-to-Ware, a software engineering firm.
“The package of benefits and incentives that Ready-to-Ware offers to professional staff is too costly. Our quarterly profits have declined since the package was introduced two years ago, at the time of our incorporation. Moreover, the package had little positive effect, as we have had only marginal success in recruiting and training high-quality professional staff. To become more profitable again, Ready-to-Ware should, therefore, offer the reduced benefits package that was in place two years ago and use the savings to fund our current research and development initiatives.”
1， The causal relationship between the benefit package given to the professional staff and the decline of the profit is not guaranteed by the coincidence that the latter occured just after the latter. Other factors that may contribute to the decline in the profit should also be considered and ruled out.
2， Research and development is a time-consuming process. Two years is not a long enough period to see the result and positive effects.
3， Even if the package is really too high and caused the declne of profit, it is still imprudent to say that the reduced benefits package that was in place two years ago will definitely work.
In this memorandum the director of research and development of Ready-to-Ware recommends reducing the benefits package offered to employees as a means of increasing profits and funding current research and development initiatives. The director’s line of reasoning is that quarterly profits have declined because of the current benefits package and can be increased by reducing it. Moreover, the director argues that the benefits package had little effect in recruiting and training high-quality employees. The director’s argument is questionable for several reasons.
To begin with, the director’s reasoning is a classic instance of “after this, therefore because of this” reasoning. The only evidence put forward to support the claim that the introduction of the benefits package is responsible for the decline in quarterly profits is that the profits declined after the package was introduced. However, this evidence is insufficient to establish the causal claim in question. Many other factors could bring about the same result. For example, the company may have failed to keep pace with competitors in introducing new products or may have failed to satisfy its customers by providing adequate support services. Until these and other possible factors are ruled out, it is premature to conclude that the introduction of the benefits package was the cause of the decline in profits.
Next, the director assumes that the benefits package currently offered is responsible for the marginal success Ready-to-Ware has experienced in recruiting and training new high-quality professionals. However, no evidence is offered to support this allegation. Other reasons for Ready-to-Ware’s failure to attract high-quality professionals are not considered. For example, perhaps Ready-to-Ware is not a cutting edge company or is not regarded as a leader in its field. Until these and other possible explanations of the company’s marginal success at recruiting and training employees are examined and eliminated it is folly to conclude that the benefits package provided to the professional staff is responsible.
In conclusion, the director has failed to provide convincing reasons for reducing the benefits package Ready-to-Ware currently offers its professional staff. To further support the recommendation the director would have to examine and eliminate other possible reasons for the decline in Ready-to-Ware’s quarterly profits and for its lack of success in attracting high-quality professionals.