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When a company decides to shrink its operations to reduce costs in order to survive, it is employing a ____ strategy.

a. Growth
b. Expansion
c. Diversification
d. Retrenchment

1 Answer

1 vote

Final answer:

A company aiming to reduce costs and shrink its operations for survival is using a retrenchment strategy, which involves downsizing and cost-cutting measures.

Step-by-step explanation:

When a company decides to shrink its operations to reduce costs in order to survive, it is employing a retrenchment strategy. Retrenchment strategies are often associated with downsizing, which includes laying off employees, closing factories, or reducing the range of products offered. This is contrasted with other strategies like growth, expansion, or diversification which are generally aimed at increasing the size or scope of a company's operations. In times of economic challenge or market contractions, retrenchment can be a crucial approach for a company's survival and eventual return to profitability.

Answer: d. Retrenchment

User Jonathan Wren
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