"Team, Our Organization Is in a Fight for Its Very

question 12

Multiple Choice

"Team, our organization is in a fight for its very survival," said Thor Isaacsen, CEO of Hammer Products. "However, over the past month, we have developed sweeping changes in the way that we do business that will ensure our long-term success. And I believe that the most effective way for you to lead change in your divisions is to

• A)keep our staff unaware of the crises we face."
• B)refrain from discussing our weaknesses and missed opportunities."
• C)establish a sense of urgency."
• D)engage in management 'happy talk'."
• E)shield employees from unhappy customers and shareholders."

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Definitions:

Sunk Costs

Expenses that have already been incurred and cannot be recovered or altered, and should not be considered in future business decisions.

Cash Flow

The cumulative sum of funds moving into and out of a company, particularly influencing its liquid assets.

Opportunity Costs

The advantages that a person, business, or investor loses by selecting one option instead of another.

Sunk Costs

Past expenses that have already been incurred and cannot be recovered, and therefore should not affect future business decisions.