Why are so many organizations exhibiting a trend toward downsizing?
a) Quality emphasis programs are creating flatter structures and redesigning work to increase efficiency.
b) Greater control reduces flexibility.
c) Quality programs create steeper hierarchies with fewer workers at the lower levels.
d) Organizations are no longer global.
e) Big companies are vanishing.
The correct answer and explanation is :
Correct Answer:
a) Quality emphasis programs are creating flatter structures and redesigning work to increase efficiency.
Explanation:
Many organizations are increasingly downsizing due to a shift in management strategies that prioritize efficiency, agility, and cost-effectiveness. This trend is largely driven by quality emphasis programs such as Total Quality Management (TQM), Lean Management, and Six Sigma, which focus on improving productivity, streamlining operations, and eliminating inefficiencies.
Traditionally, businesses operated with hierarchical structures featuring multiple layers of management, which often resulted in slow decision-making and bureaucratic inefficiencies. However, modern organizations recognize that flatter structures (with fewer management layers) promote faster decision-making, enhanced communication, and greater employee empowerment.
Moreover, with the advancement of technology and automation, many routine tasks previously handled by multiple employees are now performed more efficiently with fewer workers. This results in work redesign, job consolidation, and workforce reductions to maintain a leaner, more cost-effective operation.
Downsizing is also influenced by globalization and increased competition. Companies are under pressure to cut unnecessary costs and remain competitive in dynamic markets. Outsourcing and digital transformation further contribute to the need for a more flexible and streamlined workforce.
The incorrect options:
- b) Greater control reduces flexibility – While control impacts flexibility, it is not a primary reason for downsizing.
- c) Quality programs create steeper hierarchies – Quality programs actually promote flatter hierarchies.
- d) Organizations are no longer global – Globalization remains a major factor shaping business strategies.
- e) Big companies are vanishing – Large firms still exist but are restructuring for efficiency rather than disappearing.
Thus, the most accurate answer is (a) because modern organizations use quality-driven restructuring to reduce costs, eliminate redundancy, and improve overall efficiency.
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