When finance is tight, which action may an organisation take?

• A. Increase marketing
• B. Hire more staff
• C. Expand product line
• D. Cut costs by downsizing or delayering

Answer: (D)

When finances are tight, the priority is conserving cash by reducing ongoing costs. Cutting costs through downsizing or delayering directly lowers payroll and overhead—the fixed expenses that most quickly impact cash flow—helping the organization stay solvent and maintain essential operations during tough times. The other options require additional spending or capital and can worsen cash flow before any benefits are realized, making them less suitable when money is scarce. While investments can pay off later, immediate relief comes from trimming the organizational layers or workforce to reduce costs quickly.