Bart Has a New Idea for a Way to Cut

question 4

Multiple Choice

Bart 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 Bart's company improve the culture to create innovation?

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

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Definitions:

Corporate Hierarchy

A structure in corporations that defines the levels of authority, roles, and responsibilities from top management to lower-level employees.

Natural Monopoly

A natural monopoly occurs when a single firm can supply the entire market at a lower cost than could be achieved by multiple firms due to economies of scale.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Imperfect Competitors

Firms or entities in a market structure where they have some control over the price of their products, due to lack of perfect competition.