Which of the Following Statements Is Most Likely to Be

question 38

Multiple Choice

Which of the following statements is most likely to be true regarding organizational inertia?

• A) An increase in organization inertia leads to a proportional increase in economies of scope.
• B) Organizational inertia is caused due to forces outside an organization that make it difficult for the organization to change.
• C) An increase in organization inertia leads to a proportional decrease in division of labor.
• D) Overly bureaucratic culture is one of the factors that cause organizational inertia.

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Definitions:

Conversion Cost

The sum of direct labor costs and manufacturing overhead costs, representing the total expense to convert raw materials into finished goods.

Sales Revenue

The total revenue earned from selling products or services before deducting any costs.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured.

Differential Cost

The difference in total cost between two alternatives, highlighting how costs change under different operational decisions.