Alex Has a New Idea for a Way to Cut

question 32

Multiple Choice

Alex has a new idea for a way to cut costs in his department, but he is not willing to share his idea with his boss because the last department head that tried new cost cutting methods was recently fired because the new methods could not achieve expected results. Based on the example, how can Alex's company improve the culture to create innovation?

• A) flatten the organizational structure
• B) reward both successes and failures
• C) increase the resources in Alex's department
• D) encourage communication between various departments
• E) conduct team building activities

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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 decreasing with increasing scale.

Business Combination

A transaction or event where two or more companies merge or one company acquires another to consolidate business operations.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the cost per unit of output decreases with increasing scale.

Horizontal Merger

The combination of two or more firms competing in the same market with the same good or service.