"I'm happy to report that we have tripled in size in the past decade, and we are now the largest sporting goods retailer in the Northeast," said Chelsea Hughes, Executive VP of Strategy. "Our challenge going forward is to be big, yet act small, to capitalize on the advantages of each. One way that we can accomplish this is to
A)increase bureaucracy."
B)lessen opportunities for economies of scope."
C)acknowledge that buying power is not important."
D)decentralize decision making and organize around small, adaptive, team-based work units."
E)recognize that small size always hinders speed."

Question

Quizplus · Accepted Answer

To be big but act small, the company needs to decentralize decision making and organize around small, adaptive, team-based work units. This will help them to take advantage of economies of scope while still being able to react quickly to the needs of customers in the market. Increasing bureaucracy (A) would only slow them down and hinder their ability to innovate. Lessening opportunities for economies of scope (B) would take away one of their competitive advantages. Acknowledging that buying power is not important (C) is not a viable option as it would affect their ability to negotiate favorable deals with suppliers. Recognizing that small size always hinders speed (E) is not a relevant option as the company has already tripled in size and is now the largest sporting goods retailer in the Northeast.

"I'm Happy to Report That We Have Tripled in Size