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# To reduce costs, a company is considering a drastic

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Manager
Joined: 28 Jul 2009
Posts: 152
To reduce costs, a company is considering a drastic [#permalink]

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25 Nov 2009, 08:11
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To reduce costs, a company is considering a drastic reduction in the number of middle-level managers. This reduction would be accomplished by first offering early retirement to those 50 years of age or older with 15 years of service, and then by firing enough of the others to bring the overall reduction to 50 percent.

Each of the following, assuming that it is a realistic possibility, is a possible disadvantage to the company of the plan EXCEPT:

(A) Loyalty to the company will be reduced among those surviving the reduction, because they will perceive the status of even good managers as uncertain
(B) The restructuring of managerial jobs will allow business units to be adapted to fit a achanging business environment
(C) The company will have a smaller pool of managers from which to choose in selecting future senior managers
(D) Some of the best managers, unsure of their security against being fired, will choose early retirement
(E) The increased workload of managers remaining with the company will subject them to stress that will eventually affect their performance
Joined: 20 Aug 2009
Posts: 306
Location: Tbilisi, Georgia
Schools: Stanford (in), Tuck (WL), Wharton (ding), Cornell (in)
Re: To reduce costs, a company is considering a drastic [#permalink]

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25 Nov 2009, 09:53
(B) The restructuring of managerial jobs will allow business units to be adapted to fit a achanging business environment

IMO that is the only advantage, all other answer choices clearly represent possible threats
Intern
Joined: 04 Jun 2008
Posts: 1
Re: To reduce costs, a company is considering a drastic [#permalink]

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25 Nov 2009, 15:44
i too agree with the above answer -if the middle level managers are fired,one advantage is that the ailing/exisiting business units can follow a new business environment.(hopefully a good one )

wats ur opnion gmaters?
Manager
Joined: 19 Nov 2007
Posts: 222
Re: To reduce costs, a company is considering a drastic [#permalink]

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25 Nov 2009, 23:05
(A) Loyalty to the company will be reduced among those surviving the reduction, because they will perceive the status of even good managers as uncertain
-An disadvantage. Loyalty would be reduced and hence the performance of the company. Hence incorrect

(B) The restructuring of managerial jobs will allow business units to be adapted to fit a changing business environment
-An advantage to the company, as the company would be ready for the future. Hence correct

(C) The company will have a smaller pool of managers from which to choose in selecting future senior managers
-An disadvantage, smaller pool means lesser choice for the company

(D) Some of the best managers, unsure of their security against being fired, will choose early retirement
-An disadvantage. Some best managers leaving would effect the performance of the company

(E) The increased workload of managers remaining with the company will subject them to stress that will eventually affect their performance
-An disadvantage. Stress effects the managers performance, in turn effecting the company output.

Manager
Joined: 28 Jul 2009
Posts: 152
Re: To reduce costs, a company is considering a drastic [#permalink]

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25 Nov 2009, 23:32
I'll get OA only on Saturday, but I believe it should be B.
Senior Manager
Joined: 25 Jul 2009
Posts: 325
Re: To reduce costs, a company is considering a drastic [#permalink]

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26 Nov 2009, 05:15
Its B for sure
Manager
Joined: 08 Jul 2008
Posts: 146
Re: To reduce costs, a company is considering a drastic [#permalink]

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26 Nov 2009, 23:42
It is B
Re: To reduce costs, a company is considering a drastic   [#permalink] 26 Nov 2009, 23:42
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