Frank is the CEO of Telex Inc., a company that has a team-oriented culture in which people perform as groups and complete short-term projects to earn revenue. After studying his company's structure, Frank feels Telex's current processes are inefficient. As a result, Frank decides to downsize the organization and then use the profits to enhance the organization's efficiency. What is a disadvantage of this approach?

A) Downsizing yields slow but long-term profits.
B) Downsizing is the simplest way to ensure current and future competitiveness.
C) Downsizing will interfere with the effectiveness of the organization's teamwork.
D) Downsizing often results in acquisition of companies by other organizations.
E) Downsizing requires moving to relatively expensive locations.

Question

Taiwei Chang · Accepted Answer

Final Answer : C, Explanation :  Downsizing often leads to a decrease in employee morale, job insecurity, and mistrust among remaining employees, which can negatively impact the effectiveness of teamwork in the organization.

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