Analysis of Issue

The Analysis of Issue question asks you to discuss your opinion toward an issue. You will need to write a well-balanced analysis of the issue the test presents to you.

The most common topics relate to general business and public policy issues. Business issues include business ethics, marketing and labor. Government issues include regulatory and social welfare issues.

	Here is an example of an Analysis of Issue question: The desire of corporations to maximize profits creates conflict with the general welfare of the nation at large. Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations or reading. A typical Analysis of Issue topic may be something like: Does lowering tax rates increase economic growth? Should countries sacrifice civil liberties for safety? Should countries limit free trade to protect their industry?

A question stem might look like this:

In many countries, including the USA, the postal service is a quasi-governmental organization whose primary mission is to deliver mail to individuals within the borders of the country. Since, it is argued, mail delivery to rural addresses where the population is sparse cannot be done economically under any acceptable circumstance; the postal service is given a monopoly on mail delivery. Actually, however, mail delivery could be done economically by private corporations as long as each corporation were given a monopoly to service any given area where sparsely populated areas were balanced against densely populated areas.

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations or reading.

They say: Explain how logically persuasive you find this argument. Analyze the argument's line of reasoning and use of evidence.

Translation: Critique the argument. Discuss whether you think it's convincing or not and explain why.

Evaluate the Argument

Pick out flaws in the argument by identifying its weaknesses:

• What is the argument's conclusion?
• What is the basis of the author's conclusion?
• Do you find the argument persuasive? What makes it persuasive or not persuasive?
• What could be done to strengthen the argument?
• What assumptions does the argument rely upon? (there should be several)
  

SAMPLE ARGUMENT

For example, the GMAT test may present a statement such as the following for the analysis of an issue:

In many countries, including the USA, the postal service is a quasi-governmental organization whose primary mission is to deliver mail to individuals within the borders of the country. Since, it is argued, mail delivery to rural addresses where the population is sparse cannot be done economically under any acceptable circumstance; the postal service is given a monopoly on mail delivery. Actually, however, mail delivery could be done economically by private corporations as long as each corporation were given a monopoly to service any given area where sparsely populated areas were balanced against densely populated areas.

SAMPLE OUTLINE

In the above argument for analysis, the proposition is contained in the last sentence of the stimulus and so the analysis of the argument must focus on this sentence. They are trying to argue for the privatization of the postal system. Here is an outline of the basic points we will make to refute their argument.

I. The proposition regarding the privatization of the post office is based on two questionable assumptions and is most likely not true:

A. Population in the USA is distributed in such a way that postal market areas can be divided and costly market areas can be balanced against lucrative market areas.
B. Private corporations are more cost effective than quasi-governmental organizations.

II. Postal markets cannot be distributed so that service to any given market is economical:

A. reason for the distribution of population
B. effect of that distribution on geographically contiguous areas
C. effect of that distribution on geographically non-contiguous areas

III. Private corporations are not necessarily more cost efficient than quasi-governmental corporations.

A. case of defense contractors
B. case of private corporations

IV. The case for the privatization of the post office department is based on questionable assumptions.

SAMPLE ESSAY

Based on the outline, here is a sample essay:

The idea that the post office department can be privatized is based on two questionable assumptions: In the first place, it can be shown that population in the USA is not distributed so that postal market areas can be divided with the result that costly market areas are balanced against lucrative market areas. In the second place, it can be shown that private corporations are not necessarily more cost effective than quasi-governmental organizations. It is, therefore, most likely that privatization of the post office department cannot be accomplished.

In the first place, due to mechanization, one worker on the farm can support at least three hundred people living in the city. Large combines with relatively small crews can roll across the prairies harvesting 500 ton of wheat in a day, enough to feed hundreds of people for a year. As a result, there has been less and less employment in rural areas and, as a further result, people have left the rural areas for life in the city, creating the contemporary dilemma for postal planners. It is easy to distribute tons of mail to big city dwellers in high rise buildings at a reasonable cost. But who is going to find a cost effective way to deliver a single first class letter twenty miles down a country road in a snowstorm in January? Therefore, postal markets cannot be distributed so that service to any given market is economical using contiguous geographical markets.

Perhaps the answer lies in distributing the cost of mail delivery by balancing a cost intensive market area such as rural up-state New York with a lucrative market area such as New York City. On examination, however, this turns out to be an impossibility because population simply is not distributed in neatly balanced areas for reasons noted in the preceding paragraph. Albany, New York, probably has a greater population than the entire state of Wyoming. Is a single company going to be given Wyoming and Albany as a single market area? If so, that company will not be able to service the area economically because the costs of doing business over such a long distance are extremely high. The current post office department, in effect, already does this and it has found it to be not economical. Clearly, it is also true that postal markets cannot be distributed using noncontiguous geographical markets, so that service to any given market is economical.

Furthermore, not all private corporations are economical. The federal government has always subsidized defense contractors rewarding them for their inefficiencies with huge cost over-runs. Besides this, any number of large private corporations have gone bankrupt including Continental Airlines and Pan American Airways. Would any social planners want postal delivery discontinued to any area because a large, privatized postal company declared bankruptcy?

The argument that the post office department can be privatized is based on two questionable assumptions. It is therefore most likely that this argument is invalid (1) because populations are not distributed in such a way that large, regional post offices could be run economically, and (2) because private corporations are not necessarily cost efficient and economical. For these reasons, privatization does not appear to be an effective means of reforming our postal system.

Notice that this essay states two assumptions and then spends three paragraphs elaborating on the two main assumptions. The overall structure is tight (perhaps a few sentences could have been edited and paragraphs 2 and 3 condensed into one paragraph). Either way, this is a 5 or 6 essay.

One element here is that problems with the stimulus is strictly assumptions: about the economics of running a post office and the assumption of private sector superiority over public sector.