The CEO argued that implementing the proposed changes would not only streamline operations but also _____ employee morale, leading to increased productivity and innovation throughout the company.
Correct: C
The sentence requires parallelism between 'streamline operations' and the subsequent action affecting employee morale. 'Would not only streamline operations but also improve employee morale' maintains this parallelism and is grammatically correct. The infinitive 'improve' is needed after 'would'.