How does a virtual organization save on costs?
A) by hiring people who specialize in what they do
B) by hiring fewer people than they need and making them work much longer hours
C) by eliminating all administrative duties
D) by keeping only a small permanent staff for administrative purposes only
Answer: D
Explanation: A virtual organization can temporarily grow to a large size by hiring large numbers of freelancers. However, it keeps costs to a minimum by paying these individuals only for actual work they do and not providing benefits and compensation when there is no work for them to perform. This makes "keeping only a small permanent staff" the correct response. "Eliminating all administrative duties" is incorrect because a virtual organization does keep a small administrative staff. "Hiring people who specialize in what they do" is incorrect because hiring people with specialties does not necessarily keep costs down. "Hiring fewer people than they need" is incorrect because virtual organizations typically do not hire fewer workers than are necessary.
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