Guo-Ping would like to take action to stop a recent decline in profits and stock price at his firm. What strategy would you recommend to Guo-Ping?
A) Lay off employees to increase profits the most.
B) Make no changes. Employees and investors will react positively when they see you are not panicking.
C) Reduce facilities and other tangible assets to cut expenses.
D) Acquire a competitor to increase size and market power.
E) Lay off employees so that the survivor syndrome will cause the other workers to increase productivity.

Question

Quizplus · Accepted Answer

Reducing facilities and other tangible assets can help cut expenses and improve profitability without sacrificing the workforce or market position. Layoffs can create uncertainty and fear among the remaining employees, leading to decreased morale and productivity. Acquiring a competitor may increase market power but can also be costly and risky. Making no changes may signal a lack of action and concern to investors, resulting in continued decline. Overall, reducing expenses through tangible asset cuts would be the most prudent and effective strategy in this situation.

Guo-Ping Would Like to Take Action to Stop a Recent