Question

Identify a difference between the crisis stage and the dissolution stage of organizational decline. Select one: a. In the crisis stage, managers fail to recognize the internal or external changes that will harm their organizations, whereas in the dissolution stage, managers assume that if they just run a tighter ship, company performance will return to previous levels. b. In the crisis stage, management announces belt-tightening plans designed to cut costs, increase efficiency, and restore profits, whereas in the dissolution stage, management recognizes the need to change but still takes no action. c. Decline is reversible at the crisis stage, whereas it is irreversible at the dissolution stage. d. The crisis stage is the first stage of organizational decline, whereas the dissolution stage is the fifth stage of organizational decline.

Answer 1

Answer: The correct option is C.

Explanation: An Organizational decline usually occur when companies do not anticipate, recognize, neutralize or adapt to the pressures that threaten their survival, be it internal or external. In other words, organizational decline occurs when organizations do not think that there is a need for change.

The crisis stage of organizational decline is reached when all the prior actions taken have failed and it now becomes obvious that without any major change, the survival of the organization at risk.

The Dissolution stage in organizational decline is reached when an organization fails to make the changes needed to sustain the organization. To put it simply, it is the end of a business.

From the explanation above, we can see that if actions are taken, the crisis stage can be reversed, while the dissolution stage signifies the end of a business.

Answer 2

Answer: c. Decline is reversible at the crisis stage, whereas it is irreversible at the dissolution stage.

Explanation: Crisis Stage; at this stage decline is still reversible if the

organisation reorganizes it ways of operations or conducting business. What they can do at this point is to carryout cutbacks and layoffs which would help reduce it's financial burden and create additional capital to run the business. At the dissolution stage nothing can be done anymore to salvage the company as it would have run into bankruptcy and would need to fold up.