Identify the Correct Statement Regarding Downsizing

question 3

Multiple Choice

Identify the correct statement regarding downsizing.

• A) Downsizing improves long-term organizational effectiveness.
• B) The negative effect of downsizing is especially low among firms that engage in high-involvement work practices.
• C) Downsizing often disrupts the social networks through which people are creative and flexible.
• D) The negative impact of downsizing is especially low for those organizations that emphasize research and development.
• E) Downsizing campaigns only eliminate people who are replaceable.

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Definitions:

Net Operating Income

The amount of income generated from regular business operations after subtracting operating expenses but before taxes and interest.

Single Product

Refers to a business strategy or condition where a company focuses on producing and selling one specific product.

Absorption Costing

A costing method that includes all manufacturing costs, both direct and indirect, in the cost of a product.

Net Operating Income

The total profit of a company after operating expenses are subtracted from operating revenues, but before taxes and interest are deducted.