QUESTION TEXT: Consultant: The dramatic improvements in productivity achieved…
QUESTION TYPE: Paradox
PARADOX: The industrial revolution increased productivity by centralizing decision making. But recently, a bunch of already productive companies have increased their productivity by decreasing centralization.
ANALYSIS: The paradox is that centralization seems to both help and hurt productivity. We need to explain why certain companies improved productivity by decentralizing.
The industrial revolution was 200 years ago. It’s possible that we’ve begun to reach the limits of centralization.
- This is just a fact about most companies. This doesn’t explain how some other companies managed to improve their productivity through decentralization.
- Great – those employees must be happy! But this doesn’t explain why decentralization worked.
- Robots don’t explain decentralization. Maybe robots require central control.
- The stimulus was very specific. It talked about already productive companies i.e. those that had already learned the lessons of the industrial revolution and centralized. We need to explain why some of those companies improved productivity by decentralizing.
In other words, who cares about the companies mentioned in this answer choice? They’re not the companies that we’re talking about.
- CORRECT. This explains it. The companies in question are already productive. This answer says that those productive companies can
only become even more productive if they decentralize a bit and give employees influence.
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