Final answer:
Sharon's company is modifying its organizational structure by reducing the number of first-line managers and increasing their management span, a strategy often implemented to reduce costs and streamline operations.
Step-by-step explanation:
Sharon's company is responding to financial challenges by altering its organizational structure and design. The company is reducing the number of first-line managers and extending the span of management. This involves reshaping the hierarchy and potentially changing aspects of management to accommodate fewer managers with broader responsibilities. The intent is most likely to streamline operations and reduce costs, a tactic that can emerge from a need to improve efficiency and address financial performance issues. This adjustment can be seen as part of a broader trend towards flatter organizational structures, where the focus is on teamwork and a collaborative approach over strict hierarchical management.
The practice where the differences between low-end and high-end jobs become greater and the number of people in middle levels decreases is known as polarization. Organizations undergoing changes, such as downsizing, often see shifts in their management practices, reflecting either a Theory X or Theory Y approach depending on their viewpoint towards employee motivation and work structure.