BioMd is a manufacturer of high-end medical diagnostic equipments.The company's revenues and profit margins have come under pressure during the last two years because of decline in product demand.Daisy Howell,the CEO of the company,calls for a senior management meeting to finalize the strategies to be adopted to tackle the dip in profit margins.In the meeting,most managers argue in favor of using downsizing as a means to reducing costs and improving margins.However,Daisy strongly argued for the use of layoffs instead of downsizing.Which of the following,if true,would most strengthen Daisy's argument?

Question

Quizplus · Accepted Answer

If an internal demographics review has shown that about ten percent of the firm's employees would retire within three years, then a layoff could potentially avoid the negative impact of downsizing on the morale of the remaining employees. With upcoming retirements, the company could plan to not replace those employees and still achieve the cost reductions needed to improve profit margins. This would inherently lead to a smaller workforce, but it wouldn't carry the negative impact on employee morale and the company's reputation that downsizing would likely bring. Therefore, this strengthens Daisy's argument for using layoffs over downsizing. Options A, B, and D are not relevant to the argument and do not make a clear case for choosing layoffs over downsizing.

BioMd Is a Manufacturer of High-End Medical Diagnostic Equipments