Which of the following statements is MOST accurate in describing the outcomes of downsizing?
A) Downsizing is more effective at increasing performance than is a reduction in tangible assets.
B) Downsizing usually does NOT increase profits in the long run.
C) Downsizing is more effective in the long run than in the short run.
D) Downsizing is almost always effective in reducing long-run expenses.
E) Downsizing is effective in increasing stock prices in the long run.

Question

Quizplus · Accepted Answer

Studies have shown that downsizing usually does not increase profits in the long run. While it may provide short-term cost savings, it can also result in decreased morale, loss of institutional knowledge, and decreased productivity and innovation. Therefore, in the long term, the negative effects of downsizing can outweigh the short-term benefits.

Which of the Following Statements Is MOST Accurate in Describing