Tom Smith is a top manager at a diversified company that has been tasked to identify inefficient, poorly managed companies in other industries and then acquire and restructure them to improve their performance and increase the profitability of the total corporation. Which of the following would be a strategy Tom might take to increase the performance of one of these newly acquired companies?
A) Top managers of the acquired company are trained in more aggressive management techniques.
B) The new top-management team consolidates assets and terminates staff to reduce the cost structure.
C) The management team recommits to traditional strategies.
D) All bonuses and incentive programs are terminated.
E) The acquiring company uses the established goals to evaluate and review employees at all levels.

Question

Quizplus · Accepted Answer

Tom has been tasked with acquiring and restructuring poorly managed companies to improve their performance and profitability. One effective strategy for achieving this goal is to consolidate assets and terminate staff to reduce costs. This can help streamline operations, eliminate inefficiencies, and create a more lean and productive organization. While training top managers in more aggressive management techniques or using established goals to review employees can also be helpful, they may not be enough to address deep-seated problems within the company's structure and operations. Recommitting to traditional strategies or terminating all bonuses and incentive programs are unlikely to be effective strategies for improving performance, as they do not address the underlying issues that are causing the company to underperform in the first place.

Tom Smith Is a Top Manager at a Diversified Company