Society For Human Resource Management (SHRM) Certified Professional Practice Exam

A business that is interpreted as floundering has the following concern:

1. It is unable to pivot

2. It is not aware of the situation

3. The entity can disrupt others

4. The entity has been disrupted

The correct answer is: The entity has been disrupted

The correct interpretation points to the idea that a business described as floundering has experienced a significant challenge—specifically, it has been disrupted. This means that external factors, such as market changes, new technologies, or competitive pressures, have severely impacted its operations and effectiveness. Such disruption can lead to a decline in performance, making it difficult for the business to maintain its previous trajectory. The notion of disruption encompasses various scenarios where a business's fundamental operations or market standing are undermined, often forcing it to reassess its strategies or offerings. Recognizing that an entity has been disrupted highlights the urgency of adapting or transforming the business to survive and thrive in a changing environment. In contrast, the idea of a business being unable to pivot reflects its challenges in adapting to change rather than being inherently disrupted. Being unaware of the situation implies a lack of perception or insight, while the thought that the business can disrupt others suggests it possesses competitive power, which does not align with the notion of floundering. Thus, identifying that the entity has been disrupted aligns most accurately with concerns faced by a struggling business.