Which advantage is associated with downsizing an organization?

Downsizing an organization often leads to a significant reduction in operating costs, specifically in areas such as wages and rent. By reducing the workforce, the organization can lower its payroll expenses, which is one of the largest costs that businesses incur. Additionally, if the physical space used by the organization is also reduced as a result of downsizing, expenses related to rent or utilities can also decrease. These cost savings may provide the organization with more financial flexibility or resources to allocate towards critical areas, such as technology upgrades or innovation, ultimately enhancing its competitive position.

This rationale supports the choice regarding cost reduction as a clear advantage of downsizing, as it reflects a strategic approach to improving the organization’s financial health by streamlining operations and minimizing expenditures.