MAX Computers Manufactures Affordable Laptops and Desktops at Its Factory

question 4

Multiple Choice

MAX Computers manufactures affordable laptops and desktops at its factory in Arizona.MAX has experienced a moderate amount of financial success,but upper management wants the firm to grow at a faster rate and become a bigger player in the highly competitive computer market.The firm's greatest problems relate to its employees.Employee turnover is high-most employees at MAX leave within 2 years or less of being hired.In addition,the rate of productivity among employees is not as high as executives would like.The vice president of human resources is considering moving MAX towards a high-performance work system. Which of the following best supports the argument that MAX should move towards a high-performance work system?

• A) MAX will be able to reduce quality control issues by reassigning line and staff managers to new departments.
• B) Using tests and validated interviews during recruitment will enable MAX to screen job candidates effectively.
• C) Outsourcing clerical tasks will enable MAX to raise employee salaries, implement flexible schedules, and increase productivity.
• D) MAX's competitors regularly use benchmarking as a method for comparing their employees with those in other firms.

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Diseconomies of Scale

The phenomenon where an increase in production leads to higher costs per unit due to inefficiencies that arise from scaling up operations.

Increasing Returns

An increase in a firm’s output by a larger percentage than the percentage increase in its inputs.

Diminishing Returns

A principle stating that after a certain point, additional investment or effort yields progressively smaller increases in output.